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Spain says budget cuts, reforms beginning to pay off, country no longer in need of bailout

Associated Press
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Spain's Prime Minister Mariano Rajoy speaks in the Spanish parliament in Madrid, Wednesday May 8, 2013. Rajoy appeared to explain to Parliament his conservative government's latest round of reforms and its 2013-16 stability program. Unveiling the package recently, the government said it would take two years longer than promised to cut Spain's swollen deficit in an acknowledgement that harsh austerity measures had failed to bring its finances under control. (AP Photo/Paul White) (The Associated Press)

Spain's Prime Minister Mariano Rajoy listens to a debate in the Spanish parliament in Madrid, Wednesday May 8, 2013. Rajoy appeared to explain to Parliament his conservative government's latest round of reforms and its 2013-16 stability program. Unveiling the package recently, the government said it would take two years longer than promised to cut Spain's swollen deficit in an acknowledgement that harsh austerity measures had failed to bring its finances under control. (AP Photo/Paul White) (The Associated Press)

The Spanish government claims its austerity measures and reforms are paying off.

Conservative Prime Minister Mariano Rajoy told Parliament on Wednesday that Spain was no longer close to a financial abyss and the threat of needing a bailout had receded.

Rajoy said his policies were "beginning to work," though he said much remained to be done.

The premier claimed one major achievement was the sharp drop in recent months of the country's borrowing costs on bond markets. He said that could save the country up to 1 billion euros ($1.31 billion) this year.

Spain has been in recession for most of the past four years and has a record 27.2 percent unemployment rate. It has cut spending and raised taxes to bring its deficit down.