0911 rajoy
Spanish Prime Minister Mariano Rajoy receives German Chancellor Angela Merkel at Moncloa Palace on September 6, 2012 in Madrid, Spain. - 

Last week in Europe there was relative euphoria: The European Central Bank said it stood ready to buy the government bonds of any nation that came seeking its help. That would help countries like Spain and Italy keep their borrowing costs down, and keep them from lapsing into financial crisis.

There would be conditions, of course -- chiefly: getting government deficits under control. But the Spanish prime minister Mariano Rajoy has dampened the excitement considerably. To sort through that, Marketplace Morning Report host Jeff Horwich spoke with reporter Stephen Beard from our Eurpean desk.

"In a nutshell what he [Rajoy] said is 'we can't take any more austerity,'" Beard explained of Rajoy's recent television interview, responding to

Last week, the European Central Bank came up with a plan to drive down the borrowing costs of countries like Spain by buying large amounts of government bonds, Beard said.

"But the banks said it would only do this if the government concerned accepted conditions: more austerity, more economic reforms," he add. "Now we've had the Spanish prime minister making it clear he would not expect any more spending cuts."

Spain is the largest eurozone country in the most immediate need of help from the ECB's bond-buying bailout. "If it's government won't accept any strings attached that help may not be forthcoming," Beard said.

Refusing to go along with the austerity measures could jeapordize other EU governments support for the bailout program, according to Simon Tilford of the Center for European Reform. If that happened, "the ECB will not be allowed to buy the debt," Tilford said.