Spanish finance minister Luis de Guindos ruled out a full-scale bailout package on Friday, suggesting that the recession-stricken country no longer needs external aid as investors pile into Spanish debt.
Recent market optimism has pushed Spanish 10-year bond yields below 5 percent, in line with ECB President Mario Draghi's pledge to protect the euro area by assisting the weaker periphery economies via the OMT bond-buying program.
"It's something (OMT) that we have considered, it's a useful tool, but so far the Spanish economy has seen an important narrowing of yield spreads and we expect this to continue," De Guindos told CNBC at the World Economic Forum in Davos, Switzerland.
Spain recently raised 7 billion euros ($9.3 billion) of ten-year bonds priced to yield 5.43 percent, a far cry from the over 7 percent yields seen at the height of Spain's sovereign debt crisis last July.
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De Guindos hinted that Spain's upcoming public deficit figures will be "positive" despite speculation that the country is set to miss its 6.3 percent deficit target for 2012 due to lower tax revenue and higher transfers for social benefit schemes.
"We'll be releasing our figures in the next weeks and I can assure you that the news are going to be very positive," De Guindos said.
" I think this will be acknowledged by the markets, and it'll be evident that Spain has made an effort to reduce its public deficit."
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De Guindos also denied rumors that the Spanish government would be prepared to use public funds to compensate Bankia debt holders, including thousands of former retail clients who entrusted their savings to the bank and could face losses of up to 50 percent.
Bankia was nationalized in May 2012 after it suffered heavy losses from Spain's property market crash.