HispanicBusiness

Spanish Prime Minister Mariano Rajoy vowed Thursday to press on with his rigorous round of economic reforms and budget cuts, but ruled out any further tax increases next year.

Rajoy was speaking at a joint press conference with French President Francois Hollande, who was making his first visit to Spain since taking over as France's leader in May.

France and Spain - the eurozone's second and fourth biggest economies - are also keen to see the European Central Bank resume its government-bond programme to help head off the threat of rising borrowing costs for governments at the centre of the debt crisis, such as Madrid's.

In their comments to the press, the French and Spanish leaders also said they wanted cash-strapped Greece to remain a part of the 17-member currency bloc, but stressed that Athens also had to continue forging ahead with its reform programme.

"The Greeks want to demonstrate that they are credible," said Hollande.

Such words echoed comments made last week by German Chancellor Angela Merkel and Hollande, who have been trying to place a more positive tone on the efforts by eurozone states to slash high debt-and-deficit levels.

The meeting between Hollande and Rajoy came just a day after Merkel praised reform efforts by Italian Prime Minister Mario following talks in Berlin.

Thursday's meeting in Madrid also formed part of a round of shuttle diplomacy across the eurozone as the region's leaders face up to a critical period in their battle to resolve the debt crisis that has pushed large parts of the currency bloc, including Spain, into recession.

Rajoy said his government had no plans to include in next year's budget another round of increases in income or sales tax.

The round of top-level talks also form part of the buildup to a summit of European leaders that has been set down for October 18 and 19, which the French leader said would pave the way for a lasting solution to the debt crisis.

"We have postponed too many crucial decisions," Hollande told reporters.

The European Central Bank is also expected to consider next Thursday plans to relaunch its government bond-buying programme.

Both Merkel and Hollande held talks last week with Greek Prime Minister Antonis Samaras ahead of the release in the coming weeks of a key report by experts on Athens' progress in implementing economic reforms and budge cuts. The chancellor is to meet Rajoy in Madrid next month.