IEyeNews

iLocal News Archives

Investors’ fears fan flames of Spanish debt crisis

Spanish ten-year government bond yields soared to 6.81 per cent, the highest since 1999 and close to the seven per cent that forced bailout requests from Greece, Ireland and Portugal.

Investors are worried how Spain, which has the eurozone’s fourth-largest economy, will repay its debts even after a possible €100billion (£80.3billion) bailout to prop up its ailing banks.

Ratings agency Fitch downgraded 18 Spanish banks, following those against Santander and BBVA on Monday.

Investors said Spain could be getting punished because of fears the anti- austerity Syriza party will win elections in Greece on Sunday.

Gary Jenkins, chairman of bond  research company Swordfish, said: ‘The idea of the Spanish bailout was to calm the market in case the Greek elections do not turn out as the EU would like.

‘However, the end result was to create more volatility and create more concern.’

Italian bond yields also rose to 6.02 per cent, over fears its shrinking economy would make it difficult to reduce debts.

Austrian finance minister Maria  Fekter’s suggestion that Italy could need a rescue because of high borrowing costs was called ‘completely inappropriate’ by Italian prime minister Mario Monti.

Read more: http://www.metro.co.uk/news/world/901891-investors-fears-fan-flames-of-spanish-debt-crisis#ixzz1xcbjQcCB

LEAVE A RESPONSE

Your email address will not be published. Required fields are marked *