Monday, July 23, 2012

Spain borrowing costs hit record high of 7.3 percent

Men look at the IBEX-35 index on June 12, 2012 at Madrid's stock exchange.

Source: Press TV

Spain's borrowing costs have hit a record high of more than 7.3 percent, raising concerns over the eurozone debt crisis.

The yield on 10-year Spanish government bonds on Monday increased to 7.343 percent from 7.225 percent on Friday.
This rate of return is above the 7.0 percent danger level for long-term funding.

The Madrid stock market also plunged by about 2.0 percent in the early Monday trading after it fell nearly 6.0 percent on Friday.

The investors are uncertain about the ability of the conservative government of Prime Minister Mariano Rajoy to stabilize the crisis-stricken banking system and the public finances.
Rajoy recently announced massive spending cuts and other measures to save 65 billion euros to cut the country’s public deficit.
Spain is now in a catastrophic financial situation similar to that of Greece, Ireland and Portugal, which have been forced to seek international bailouts shortly after their bond-yields exceeded the seven percent threshold.
The EU member state has been struggling with its ailing economy since the country’s collapse into recession as the result of the global financial crisis roughly five years ago.
Various EU member states have been struggling with a deep economic stagnancy since the bloc’s financial crisis began about five years ago, forcing some of the most affected nations to adopt unbearable austerity measures to be eligible to get the EU bailouts

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