Following talks at the European Commission, Spanish Economy Minister Luis de Guindos said his country had not yet requested financial assistance and had no plans to do so in the short term.

However there are believed to be high level discussions taking place behind the scenes as mechanisms are examined as to how Spain could avail of rescue funds if required without recourse to a formalised bailout.

Thursday will prove to be a critical litmus test for Spain as they test the market by issuing €2 bn of government bonds at auction.