Spain gov't to confront US$274 bil. financing headache in new year

The eurozone's fourth-biggest economy has skirted a rescue so far even after slipping into a recession in mid-2011 that has sent the unemployment rate soaring to 25 percent, the highest in Spain's modern history.

Prime Minister Mariano Rajoy's government reached out in June for a eurozone rescue loan of up to 100 billion euros to fix the balance sheets of Spanish banks, crushed by bad loans since a 2008 property crash.

But even as investors fled Spain, sending its 10-year-bond yield above seven percent mid-year as they watched Madrid struggle to curb soaring public debt, Rajoy managed to swerve the politically costly option of pleading for international help.

European Central Bank chief Mario Draghi gave decisive support in September when he announced the bank's readiness to buy an unlimited sum of bonds to curb borrowing costs for member states that accept strict conditions.

The prospect of such intervention alone was enough to calm the selling of Spanish debt securities.

A grateful Rajoy says he can get by for now without even seeking the ECB's bond-buying intervention.

Spain's 10-year bond yields were trading below 5.3 percent in the past week.

In his final news conference of the year, the prime minister warned that Spain's economy faced a “very tough” year ahead.

1|2|3|Next Page>>

SHARE CLOSE
Blogger		Google+
Live Journal		Plurk
Stumble Upon

Tweet

	PREVIOUS ARTICLE
	Germany nears arms deal with Saudi Arabia: report

NEXT ARTICLE
Obama wants gun violence measures passed in 2013

Write a Comment

Terms

Enter your comments - 3000 characters max

Type in image code

 Receive China Post promos
 Respond to this email

Submit