What the Spanish government needs to pay to raise money continues to rise. Soon its borrowing costs will become financially untenable, or they may have already. The nation raised three billion euros today. Spain had to pay an average yield of 6.43% at auction, based on figures for 10-year bonds. That number has risen in less than a month.
The rising borrowing costs and estimated price Europe and the International Monetary Fund would have to pay to loan Spain tens of billions of dollars for both its national and bank debt requirements makes the debt problem in the eurozone more dire.
The debate about bailouts was partially settled at a recent summit of the region’s leaders. But the solutions were expressed broadly and have not been worked out in detail. Those details may become less generous to nations like Spain if its fortunes continue to disintegrate.
Douglas A. McIntyre