Spain now the 'focal point' of euro debt crisis

Rick Moran
With the political situation in Spain so precarious, investors in sovereign debt are wary of the government's promises to cut about 27 billion euros from its budget. This caused Spanish bond yeilds to soar and raised fresh concerns about a possible huge bailout. Reuters: Concerns Spain will struggle to meet tough deficit targets and treat its ailing banks as the economy slows have hampered its debt issuance plans and fuelled concern it might be forced to follow Greece, Ireland and Portugal in seeking a bailout. "Spain has become the focal point for investor anxiety about the euro zone. This is a bout of investor nervousness, the severity of which is difficult to ascertain at this point," said Nicholas Spiro at Spiro Sovereign Strategy. European shares extended their losses after the auction and the cost of insuring Spanish and Italian debt against default rose. Spanish yields rose on the secondary market, where the key 10-year bond was up around 25 basis points close ...(Read Full Post)

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