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Spain feels the debt heat

As Spain's borrowing costs pushed it closer to needing a bailout, the country's economy minister Luis de Guindos has been asking for help from his French counterpart Pierre Moscovici.

He got the Paris government's support for fast implementation of a European agreement to use bailout funds to stabilise the region's bond markets.

Both ministers stressed the high interest rates Madrid is having to pay to borrow do not reflect Spain's economic fundamentals, its growth potential and the sustainability of its public debt.

Economist Rafael Pampillon at the Madrid Business School said: "Solutions will have to come from outside Spain. They could come either from the European Central Bank, if it decides to buy Spanish bonds in the secondary market so yields fall. Another solution is for the European Rescue Fund to buy public debt. If not, we'll have a full-scale bai

Added: Jul-25-2012 Occurred On: Jul-25-2012
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Tags: spain, debt, euro, crisis, banks, EU, ECB, france, germany, europe
Location: Spain (load item map)
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