Spain is once again set to become the focus of market attention as the government tries to raise between two and three billion euros via short-term loans.
After yesterday’s alarmingly high yield on its 10-year bonds, the question today is what further crippling rate will be set.
Meanwhile Spain’s finance minister denies the country needs help. Luis de Guindos claims recent economic reforms and agreements over the recapitalisation of Spain’s banks will establish a base for economic growth.
However, some analysts disagree and fear Spain may have run out of options:
Juan Jose Toribio – economic analyst at IESE Business School in Madrid said:
“ The austerity policy was an alternative a few months ago, when there was still a possibility that it could work. Right now the market does not seem to like it..its not going to trust again anything the government might do.”
On the streets of Madrid there is anger over the government’s handling of the crisis. If Spain is forced to ask for a full scale bailout – and there is doubt Europe has sufficient funds to help – then any more cuts will be strongly rejected.