Mariano Rajoy, Spain’s prime minister, has called for centralised control of national budgets in the eurozone in an unexpected gesture to mollify Brussels and Berlin on the eve of what is expected to be a crucial week for Madrid.

Spain’s treasury plans to auction sovereign bonds on Thursday, even though analysts say the country may soon need an international bailout and yields on its debt have risen close to the 7 per cent level that heralded previous rescues for Greece, Ireland and Portugal.

Meanwhile Cyprus, a much smaller eurozone economy affected by the crisis in Greece, is facing similar difficulties and may need to be rescued first. Panicos Demetriades, central bank governor, told the Financial Times that Cyprus was increasingly likely to seek European aid because of the need to find €1.8bn to recapitalise Cyprus Popular Bank, the country’s second-largest lender, by the end of this month.