Spain paid a euro era record price to sell short-term debt on
Tuesday, pushing it closer to becoming the biggest eurozone country to
be shut out of credit markets.
The soaring borrowing costs highlight the shortcomings of a June 9 eurozone deal to lend Spain up to 100 billion euros (US$126 billion) for its banks. They also illustrate how Europe’s problems run much deeper than Greece, brought back from the brink of default in Sunday’s parliamentary election.
Leaders of the world’s major economies, meeting for a G20 summit in Los Cabos, Mexico, piled pressure on the eurozone to take decisive steps towards a fiscal and banking union to stem a two-and-a-half year old debt crisis that is holding back the global economy.
German Chancellor Angela Merkel, leader of Europe’s biggest economy and main paymaster, agreed to move towards a more integrated banking system, according to a draft G20 communique, but she continues to rule out mutualizing the eurozone’s debts.
Spain, the eurozone’s fourth largest economy, had to pay 5.07% to sell 12-month Treasury bills and 5.11% to sell 18-month paper – an increase of about 200 basis points on the last auction for the same maturities a month ago.
While Spain’s 10-year bond yields eased slightly to around 7% after the sale, the auction underscored the government’s increasingly shrill pleas for help from the European Central Bank, two days before Madrid tries to sell three-to-five year bonds.
Read more: http://business.financialpost.com/2012/06/19/spains-debt-costs-reach-alarm-levels/
The soaring borrowing costs highlight the shortcomings of a June 9 eurozone deal to lend Spain up to 100 billion euros (US$126 billion) for its banks. They also illustrate how Europe’s problems run much deeper than Greece, brought back from the brink of default in Sunday’s parliamentary election.
Leaders of the world’s major economies, meeting for a G20 summit in Los Cabos, Mexico, piled pressure on the eurozone to take decisive steps towards a fiscal and banking union to stem a two-and-a-half year old debt crisis that is holding back the global economy.
German Chancellor Angela Merkel, leader of Europe’s biggest economy and main paymaster, agreed to move towards a more integrated banking system, according to a draft G20 communique, but she continues to rule out mutualizing the eurozone’s debts.
Spain, the eurozone’s fourth largest economy, had to pay 5.07% to sell 12-month Treasury bills and 5.11% to sell 18-month paper – an increase of about 200 basis points on the last auction for the same maturities a month ago.
While Spain’s 10-year bond yields eased slightly to around 7% after the sale, the auction underscored the government’s increasingly shrill pleas for help from the European Central Bank, two days before Madrid tries to sell three-to-five year bonds.
Read more: http://business.financialpost.com/2012/06/19/spains-debt-costs-reach-alarm-levels/
No comments:
Post a Comment