By Simon Miller

Spain is inching closer to asking for a sovereign bailout, its prime minister hinted at a press conference today.

Speaking to reporters, Spanish prime minster Mariano Rajoy said he would need to know the conditions and form that a rescue would take.

With borrowing costs hitting new highs and Spanish regions saying they may need financial assistance from the central government, speculation has been growing that Spain would ask for a bailout.

Following a cabinet meeting, Rajoy told reporters that he would consider asking eurozone bailout funds to buy Spanish debt if it was best for the country.

He said: "We still don't know what these measures are. What I want to know is what these measures are, what they mean and whether they are appropriate and, in light of the circumstances, we will make a decision, but I have still not taken any decision."

Rajoy added: "I will do, as I always do, what I believe to be in the best interest of the Spanish people."

The prime minister said that it had been increasingly difficult for the coutnry to refinance its debts and added that the biggest problem was that Spain owed a great deal and "we must repay that money and, right now, it's very difficult that anyone would lend to us, or would refinance the debts that we have".

Rajoy also said that the government was urging the eurozone to come up with measures including banking and fiscal union to resolve the debt crisis.

He said: "In that letter, I say what is urgent, a single oversight system, a mechanism for the direct recapitalisation of the banks. I mention the need for the EU to employ tools to ensure access to the funding markets, flexibly and efficiently, and for it to come up with a proposal for a banking union and fiscal union."

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