English | دری

Spanish Borrowing Costs Hit an Unaffordable Rate

in International Business

Spanish Borrowing Costs Hit an Unaffordable Rate

The yield or interest rate on Spanish 10-year bonds hit 7%, a level that market-watchers consider is unaffordable for a country to raise money on the bond markets in the long term.

Spain is now at a critical point where once Greece, Ireland and Portugal all sought an international bailout.

The yield indicates the interest rate a government would have to pay to raise money from financial markets when it holds bond auctions. While Spain can afford the high rates for a few weeks at least, it would find them too expensive in the longer term.

Details of the bailout of Spain’s banks are expected from Eurozone ministers, who will meet on Monday.

But an official with Spain’s economy ministry said last week that the meeting of euro zone finance ministers was not expected to generate a figure for how much Spain would tap. Ministers planned to discuss terms of the loan and may or may not finalize some of them at the evening session, said the official, who spoke on condition of anonymity in keeping with policy.

Spain’s high borrowing costs will be a blow for the Eurozone to handle, as the country’s economy is the 4th largest among 17 nations that use the common Euro currency and it is also larger than those of Greece, Ireland and Portugal combined.


Tags assigned to this article:
Spain bailoutSpain borrowing costsSpanish Banks

Related Articles

World Bank warns of soaring prices hitting poor

World food prices jumped 10% in July, raising fears of soaring prices for the planet’s poorest. The World Bank urged

Fed chief Ben Bernanke says recovery not complete

US Federal Reserve Chairman Ben Bernanke has said the US economy is yet to fully recover from the impact of

Japan, China and S Korea edge towards free-trade deal

Japan, China and South Korea have moved closer to signing a trilateral investment agreement that could pave the way for

No comments

Write a comment
No Comments Yet! You can be first to comment this post!

Write a Comment

Your e-mail address will not be published.
Required fields are marked*