Spain saw its borrowing costs soar Tuesday as it tapped markets for the first time since Greek elections, feeding fears it could be the next victim of the eurozone crisis. Deepening concerns over Spains\'s fast-rising debt and its banks, which have been thrown a eurozone lifeline of up to 100 billion euros ($125 billion), have driven Spain to the centre of the storm. Even as Greece\'s pro-bailout parties negotiated the terms of a coalition government, averting the immediate risk of a disorderly exit from the eurozone, Spain\'s troubles mounted. Spain\'s Treasury succeeded in raising 3.04 billion euros ($3.8 billion), beating its target 2.0-3.0-billion-euro target in an auction of 12- and 18-month notes. But it had to pay exorbitant rates to lure investors -- 5.074 percent for 12-month debt and 5.107 percent for 18-month debt. \"We are entering a situation of near panic,\" said Fernando Ballabriga, head of economics at ESADE business school. \"Financing could be cut off drastically from one day to the next. It is very difficult to predict,\" he said. \"Now it is focussed on Spain. In no time it could be Italy.\" Spain is paying rates that are unsustainable and put it on track for a full-blown bailout, said report by Kathleen Brooks, research director in London at online brokerage Forex.com. The eurozone\'s fourth largest economy could avoid a state rescue only if its debts were underwritten by stronger eurozone partners and the European Central Bank stepped in to buy up its debt, she said. \"It\'s unlikely that fiscal union and pooling of debt is likely to happen any time soon, and definitely not before the EU summit at the end of the month,\" Brooks said. \"But at the rate its yields are rising, Spain doesn\'t have enough time to wait for Europe\'s politicians to decide whether or not to underwrite the debts of the weakest states, it needs action now.\" The yield on Spanish benchmark 10-year government bonds shattered the 7.0-percent barrier on Monday for the first time since the creation of the euro in 1999, pushing over 7.2 percent. On Tuesday, the yield on 10-bonds dipped to 7.003 percent, a rate regarded as unaffordable. The extra rate charged on Spanish 10-year bonds when compared to safe-bet German bonds, known as the risk premium, hovered at 5.63 percentage points, near euro-era records. Adding to the sense of uncertainty, a financial source said a second audit of the banks, which is to follow a first exam due by Thursday, had been delayed from end-July to September to allow time to gather more information. \"The eurozone crisis is entering a dangerous and existential phase with the rise in Spanish bond yields pointing to the need for a bailout while in Greece the political situation looks fragile and not strong enough to diminish the scenario of a Greek exit,\" said Neil MacKinnon, an analyst at VTB Capital financial group. Greece\'s New Democracy conservatives were negotiating a coalition with socialists Pasok and the Democratic Left after winning more votes than radical leftists Syriza, who want Greece\'s EU-IMF bailout deal torn up. The three parties \"are close to a deal,\" the socialist daily Ethnos reported. Michael Hewson, senior market analyst at CMC Markets UK, said a draft communique by Group of 20 leaders in Mexico had failed to instill market confidence in the troubled eurozone. \"The markets clearly weren\'t listening,\" he said. \"All G20 members will take the necessary actions to strengthen global growth and restore confidence,\" said a draft communique seen by AFP. It promised that eurozone members would safeguard the stability of the single currency in the face of volatile markets. The draft allowed no hint that German Chancellor Angela Merkel or her allies might crumble and allow the ECB to pump out cash or to pool German debt with that of the weaker eurozone members in order to create low-interest eurobonds. But it contained a phrase that opened up the possibility of more lending and spending if the European economy continues to struggle. \"Should economic conditions deteriorate significantly further, those countries with sufficient fiscal space stand ready to coordinate and implement discretionary fiscal actions to support domestic demand,\" the draft reads.