The Spanish cabinet adopted on Friday the draft Law on Transparency in order to combat tax evasion.

In the press conference following a cabinet meeting, Spanish Deputy Prime Minister Soraya Saenz de Santamaria said that public sector workers could go to prison (between one and four years) if they distort accounts and hide accounting information.

There is also a possibility of being disqualified between three and 10 years and the person making a serious offence will not be able to stand for elections.

The deputy prime minister pointed out that the law establishes an aggravated tax crime when the amount defrauded is above 600 billion euros (about 738 billion US dollars). This could imply prison for up to six years and the crime would not prescribe until 10 years.

Saenz de Santamaria wanted to highlight that these measures will increase credibility in the country and denied Spain will need a bailout for the whole country.

"Spain will not ask for a bailout and the bailout is not an option," she said.

Earlier reports on Friday said Spain had recognized that if its borrowing costs remain so high they might need a bailout of 300 billion euros.

Saenz de Santamaria denied this possibility, saying the Spanish government is working to implement the agreements adopted in the last European Council meeting in a bid to provide with stability in the eurozone.

Meanwhile, French President Francois Hollande and German Chancellor Angela Merkel issued a joint statement on Friday with a similar message of the one launched on Thursday by European Central Bank (ECB) President Mario Draghi.

They stated they will do whatever is necessary to protect the eurozone.

Rumours about a coordinated action between the ECB and the European fund to buy Spanish debt have diminished pressure on the Spanish stock market in Madrid. The risk premium fell to 535 points on Friday and the 10-year bond interest rate was 6.75 percent at closing time. (1 euro = 1.23 US dollars)