Rate on Spanish 10-Year Bonds Hits Fresh High at 7.18 Percent
June 18th, 2012Via: AP:
Spain’s ability to manage its debt without an international bailout was thrown into doubt Monday after investors pushed its borrowing rates up to the level at which Greece, Portugal and Ireland had sought help.
Investor sentiment improved briefly in the morning as electoral results in Greece suggested the country would not drop out of the euro currency union, a scenario that would have put severe stress on Spain’s markets.
But that market relief quickly transformed into concern in Madrid as it became clear that Spain’s fundamental economic and fiscal problems remain huge.
The interest rate on Spain’s 10-year bonds — an indicator of market confidence in how well a country can pay down its debt —hit a fresh eurozone era high of 7.18 percent before easing in the afternoon and closing at 7.12 percent. It is the first time since Spain joined the eurozone that it ended above 7 percent. Stocks plunged 3 percent on Madrid’s main index.
