Spain plans to strip regions of powers in bid to calm markets

Officials said Madrid was ready to intervene if the regions continued to bust their budgets and hamper the central government's austerity drive. Spain's borrowing costs rose to 6.08pc, plunging deeper into the territory considered unsustainably expensive. Prime minister Mariano Rajoy warned that Spain would not be able to fund itself without the savage cuts and sticking to the deficit reduction plans. "The fundamental objective at the moment is to reduce the deficit," he said a conference in Madrid. "If we don't achieve this, the rest won't matter: we won't be able to fund our debt, we won't be able to meet our commitments." Almost all Spain's regions, which control large parts of their budgets including education and health, have exceeded their budget deficit targets. The southern region of Analucia, has been openly critical of Mr Rajoy's plans.