Spain and Portugal have hurried to disassociate themselves from Ireland’s debt crisis, saying their own fiscal problems can be solved without the kind of rescue package mooted for Ireland by the European Union and the International Monetary Fund.

José Luis Rodríguez Zapatero, Spain’s socialist prime minister, said in parliament on Thursday the government was fully committed to cutting its budget deficit and reforming the country’s pension system. Elena Salgado, the finance minister, said earlier she saw no reason to compare Spain with Ireland or Portugal.

In a message aimed at international financial markets that have grown jittery about weaker eurozone economies, Mr Zapatero said that for “greater security” the government’s work programme would be pulled together into an “action plan” for the next 15 months. This would be approved at Friday’s cabinet meeting.

“The commitment to cut the deficit is one which must be fulfilled exactly as promised, because on it depends the confidence in our economy that will pave the way for economic recovery and the growth of employment,” he said.

Spanish officials were relieved by the relative success of an auction of 10- and 30-year bonds on Thursday. Although the interest rates paid by Spain were half a percentage point higher than two months ago, the rates were slightly lower than expected and demand was robust. The Spanish economy is so large that a bail-out would threaten the survival of the eurozone.

Portugal, with an economy a sixth the size of Spain’s, is less of a systemic risk but is regarded by investors as more of a credit risk and next in line for a possible rescue after Ireland and Greece.

Fernando Teixeira dos Santos, Portuguese finance minister, said Lisbon could finance its debt in the market and the minority socialist government had no intention to ask the international community for help. There was no alternative “plan A, B or C”, he said.

In a clear comparison with Ireland, he said Portugal had not suffered a housing market collapse and had a banking sector that was “resilient, solid and well capitalised”.

Lisbon-based economists said the biggest test of Portugal’s borrowing capacity would come early next year, when the government needs to raise a large part of an annual borrowing requirement estimated at about €20bn.

Spain and Portugal, like other indebted western economies, are caught between the conflicting demands of economists and investors with incompatible recipes for recovery.

Some are insisting on ever harsher austerity programmes. “The agenda needs to be clear and decisive, accepting that Spain needs to restore fiscal discipline aggressively,” said Raj Badiani, economist at IHS Global Insight, in a note on Spain on Thursday.

Other, more Keynesian, voices say too much austerity imposed by Germany and other northern Europeans could crush the weaker economies.

“In a world of structurally deficient demand, the governments of ‘core’ Europe are pursuing fiscal austerity with feckless abandon,” said Jamie Dannhauser of Lombard Street Research. “This means an unnecessarily painful adjustment for the periphery countries.”

Financial Times