07/02/13 14:19 CET
| updated xx mn ago
| updated at xx
Spain’s borrowing costs climbed at its latest bond auction due to an alleged corruption scandal amongst top politicians and concerns over its weak economy.
However interest rates on the 4.6 billion euros worth of government bonds that were sold remain far below previous crisis levels and demand from investors was solid.
For bonds maturing in two years time, Madrid had to offer just over 2.8 percent, but that is well down on the more than seven percent reached last summer.
“The result of today’s auction reflects the recent shift in sentiment towards Spain – a marked increase in yields after months of declines,” said Nicholas Spiro, managing director of Spiro Sovereign Strategy in London.
But he said that Spain should be pleased by the results given the current economic and political problems.
Spain is also being scrutinised by investors for potential political instability because of a widening corruption scandal involving officials of the ruling People’s Party.
A former party treasurer, Luis Barcenas, has described as fakes handwritten ledgers published last week by El Pais newspaper, which accused the party of channelling payments through secret accounts from managers of building companies to its leaders, including Prime Minister Mariano Rajoy.
Rajoy has also denied any wrongdoing.
Spain has been at the centre of the eurozone debt crisis as it fights to deflate one of the highest budget deficits in the bloc through wide-reaching austerity measures, which many claim could make economic recovery harder.
The government is expected to announce a public deficit of around seven percent of gross domestic product in 2012 in the next few weeks, down from over nine percent a year earlier.
However, many fear such a sharp reduction implies unprecedented budget cutting efforts that will be near impossible to continue.
Madrid’s budget plan faces strong headwinds from rising costs of unemployment at 26 percent, an aging population and high debt funding bills.
- 1euronews live TV - News | euronews : the latest international news as video on demand
- 2International news | euronews, latest international news
- 3Hope vs harsh reality: challenges to global education goals in the 21st century
- 4Partnering to grow Europe
- 5Madrid to appeal Catalan road to independence from Spain
- 6Thousands in Bucharest blame corruption for Friday’s nightclub blaze
- 7Macedonian Postcards: The Mavrovo National Park
- 8Extras : euronews : the latest international news as video on demand
- 9Jorge Lorenzo clinches his third MotoGP title in Valencia
- 10latest Learning World - All Programmes | euronews : the latest international news as video on demand
- 11Moldova: protesters storm Parliament
- 12Humans consume more than planet can produce on ‘Earth Overshoot Day’
- 13International breaking news | euronews online world breaking news in video
- 14Evo Morales celebrates his birthday by playing football
- 15Benzema questioned in French sex tape case
- 16Norway sends Syrian refugees back to Russia
- 17Paris: “I would rather see my brother in prison than in a cemetery”
- 18Business news and finance news | euronews: international economic and finance news
- 19Special Reports : euronews : the latest international news as video on demand
- 20Merroussis clinches the 33rd Athens Authentic Marathon
latest economy news
Japan’s yen for zen in the financial markets
Eurozone GDP growth still weak, Greece in recession again
Kremlin ‘considering stimulus plan for Russian economy’
French and German finance chiefs discuss economic weakness and eurozone recovery
To Russia with cash: Chinese tourists offset fall in Western visitors
Wires > Business
- 15:28 CET BP extends scope of Khazzan gas field development in Oman
- 15:11 CET Carrefour offices searched in French agriculture pricing…
- 15:05 CET Analysis – Fed’s ‘dot plot’ looks increasingly out of touch on…
- 14:23 CET Orange, SFR, Free deal on Bouygues imminent – newspaper
- 14:07 CET Ireland aims to sell 50 percent of AIB by 2020 – finance minister
- 13:16 CET Germany wants to introduce random emissions tests on cars
- 12:46 CET BAE Systems lines up oil executive Woodburn as next CEO – source
- 12:23 CET Iran offers mining riches post-sanctions, but investors cautious