Interest on long-term bonds of Spain today shifted the critical level of 7%, considered unsustainable in the long run. Rising interest rates reflect investors’ fears of further deterioration of the debt crisis in Spain – the fourth largest economy in the euro zone, AP.
The bad news for Madrid came hours before today’s meeting of finance ministers from the euro area, which most analysts have high expectations.
At a summit in Brussels on 29 June, euro zone leaders have agreed on the allocation of 100 billion euros in aid to Spanish banks. Then it was reported that details of implementing this decision will be up to 9 July, Air Force recalls.
Hours before kick-interest 10-year Spanish bonds on the secondary market amounted to 7.026%. For comparison – Friday rate was 6.912%. 7 percentage barrier is considered a psychological boundary, as after countries such as Greece, Ireland and Portugal were forced to seek international financial assistance.
Risk premium (the difference with the German interest) in Spanish 10-year bonds widened to 566 basis points (5.66 percent). Simultaneously, the yield on Italian bonds with 10-year maturity rose to 6.113 percent from 6.016 percent on Friday.
The meeting of finance ministers in Brussels today will discuss a loan to rescue the banks in Spain and Cyprus, and the situation in Greece, which require the “troika” of renegotiating the terms of the second rescue package.