Breaking records of the unenviable kind – Spain’s benchmark borrowing rate yesterday hit its highest level since adopting the euro currency as markets continue to be uneasy about the eurozone.
The bond rate is a measure of a nation’s financial health – a yield just short of seven per cent implies the patient is poorly.
Finance Minister Luis de Guindos is putting on a brave face:
“These are moments of huge tension, we all know, but the Spanish government and the other governments of the eurozone know very well what should be done.”
Spain’s banks are not being spared either: despite the availability of 100 billion euros from the EU to help shore up their balance sheets, ratings agency Fitch has downgraded 18 of them. No one knows what strings are attached to the loan.
But in Greece, radical left-wing leader Alexis Tsipras thinks whatever the conditions set for the Spanish rescue deal, they must be better than those imposed on his country. He has declared he will renegotiate the Greek bailout if he wins Sunday’s election.
But that could lead to a Greek exit from the bloc. With all eyes on Athens there is still the matter of other struggling economies. Italy and its high borrowing costs is the latest to deny needing a rescue.