Stocks rose and the euro recovered from two-week lows on Thursday after the Spanish government said it would cut spending sharply and opened the door for a potential European bailout.
Spain's Deputy Prime Minister Soraya Saenz de Santamaria announced a timetable for economic reforms and a tough 2013 budget focused on spending cuts rather than tax increases as the country continues to negotiate a possible European aid package to ease high borrowing costs.
Officials said Spain was still analyzing the terms of the potential European Central Bank bond-buying program announced earlier this month and added that a decision on an aid request will be taken when the effect of the spending cuts is fully known.
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