25 Jul 2012

New financial pressures on Spain

9:39 am on 25 July 2012

Spain is facing new financial pressures with its borrowing costs edging higher and the stock market falling.

Madrid's borrowing costs are now 7.57% - well above the interest rate level that forced Greece, Ireland and Portugal to secure international bailouts in the last two years.

Investors sold Spanish stocks on Tuesday, with the market plunging more than 3%.

Spain has called for the immediate implementation of measures agreed last month. These include aid directed at Spanish banks without adding to national debt.

Spain has already been granted a loan package worth 100 billion euros for use by its banks. But a number of the country's 17 autonomous regions are in deep debt.

Catalonia said on Friday it will need government funds and Valencia says it will also need assistance.

The BBC reports Economy Minister Luis de Guindos will meet French Finance Minister Pierre Moscovici in Paris on Wednesday.


at Pimco chief executive Mohamed El-Erian says Spain will require a bailout because the private sector is taking money out of Europe that the country needs to generate growth.