It was announced last week that Spanish banks bad loans rose in March to their highest in 18 years, underscoring the problems facing the Government as it drafts in independent auditors in an attempt to reassure investors it can clean up the sector.

Troubled banks, along with overspending in indebted regions, are the two biggest risks for Spains public finances amid fears that its economy could follow Greece in becoming virtually bankrupt and need a massive bailout from its Eurozone partners.

But Rajoy (pictured above centre) pledged his support to Madrid's bid following a meeting with Alejandro Blanco, the President of Madrid 2020 and the Spanish Olympic Committee (COE).

The support comes at a vital time for the Spanish capital as its team arrive here for SportAccord where, on Wednesday (May 23), the ruling Executive Committee of the International Olympic Committee (IOC) will meet to decide which cities bidding for 2020 should be put forward onto the shortlist.

Madrid is competing against Baku, Doha, Istanbul and Tokyo but believe they are certainties to be included. 

Blanco and Ana Botella, the Mayor of Madrid, met with Rajoy at the Moncloa Palace, where the President expressed his "full support" to the bid and showed his willingness to support its development through concrete steps once the capital officially becomes a Candidate City, they claimed.

Blano claimed that the meeting was to confirm his belief that the bid is "a great project for Madrid and for Spain".

Rajoy "is familiar with the bid, he likes it and supports it", he added.

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