The crisis in U.S. mortgages is unlikely to have a direct impact on Spain's housing market or financial systems, Prime Minister Jose Luis Rodriguez Zapatero said in a newspaper interview published on Sunday.
The remarks were more upbeat than those of Spanish Economy Minister Pedro Solbes on Friday, who said the economy faced risks from the global liquidity squeeze via its potential impact on other big world economies and the euro zone.
"Our financial systems, our lending institutions are among the most solvent in the world," Zapatero said in an interview with left-leaning newspaper El Pais.
The prime minister said he believed interest rates had reached their upper limit, echoing comments made on Friday by Solbes, and that Spain's economy was growing at a solid pace.
"The message is one of calmness and confidence," he said.
The subprime crisis coincides with the end of a nine-year residential construction and property boom in Spain and a rise in mortgage rates to a seven-year high.
Spanish growth, still well above average euro zone growth, came off a six-year high during the second quarter due to a slowdown in construction and consumer spending.
Economists expect growth to fall further as Spanish banks become more risk averse and reduce lending to firms and households that have some of Europe's highest debt levels.
Zapatero also said in the interview that he expected to book a public sector budget surplus equivalent to 1.8 percent of gross domestic product in 2007.
This is higher than previous government estimates of a full-year surplus of 1 percent of GDP and in line with 2006's surplus of 1.83 percent.