Elena Salgado, the Spanish Finance Minister, reached an agreement with finance chiefs of the nation's 17 regions, which are responsible for health and education spending, to implement new spending rules, after 4-hour meeting yesterday in Madrid.

She gave the regions a period of six months through which they should deliver legislations to their Parliaments.

The agreement comes in the light of the efforts done by the Spanish government to reduce budget deficit which reached 11% of GDP, where officials are looking forward to cutting the rate to 6% in 2011 from 9.2% last year. Also, it aims to lower bond yields that climbed by 10 points to 332 basis points versus German bunds yesterday.