MADRID (AFP) - Spain on Tuesday defended a 1.7-billion Euro (S$2.7 billion) bid to host the Olympics in Madrid in 2020 even as the country battles a recession and unemployment that has shot to 25 per cent, while slashing spending.

Spain's delegation submitted the 360-page bid documents to the International Olympic Committee (IOC) headquarters in Lausanne, Switzerland, on Monday.

If Madrid beats favourite Tokyo and rival Istanbul, it estimates it would have to invest another 1.7 billion Euros to complete the infrastructure for the Games.

The budget is "austere and responsible", Education, Culture and Sports Minister Jose Ignacio Wert told a press conference in Madrid.

Madrid will find out in September whether it has been chosen, after finishing third for the 2012 and second for the 2016 editions.