spanish pm delays holiday as risk premium hits record
Last Updated : GMT 06:41:18
Arab Today, arab today
Arab Today, arab today

Spanish PM delays holiday as risk premium hits record

Arab Today, arab today

Arab Today, arab today Spanish PM delays holiday as risk premium hits record

Madrid - AFP

Spain\'s debt risk premium soared to a record high Tuesday forcing the prime minister to delay his vacation so as to keep tabs on a growing economic emergency. The premium demanded for buying Spanish 10-year bonds over safe-bet German bonds surged to more than four percentage points -- 404 basis points -- the highest since the introduction of the euro in 1999. Prime Minister Jose Luis Rodriguez Zapatero \"has postponed the start of his holidays; he is keeping an eye on the international economic situation,\" an official at the prime minister\'s office said. Zapatero was in contact with his Finance Minister Elena Salgado\'s cabinet, his office said. Spain had contacted Britain, France, Germany and also Italy, where the debt risk premium hit a record high too. Investors sold down Spanish and Italian bonds on concerns that their debt problems will only get worse as economic growth slows. The eurozone debt crisis has already claimed Greece, Ireland and Portugal, forcing them to seek bailouts from the European Union and International Monetary Fund. There are growing fears Italy and Spain could be next in line. One trigger for the jump in the debt premium was a rumour in the market that Europe would release Italy and Spain from their obligation to take part in the European rescue of Greece, said Soledad Bueno, an analyst with Inversis. \"That gave the impression that they are not in a good situation,\" the analyst said. Edward Hugh, an independent Barcelona-based economist, said Zapatero\'s decision last month to call a general election in November had already stirred up concerns about management of the crisis and fuelled doubts over Madrid\'s commitment to meet deficit-cutting goals in the run-up to the polls. The rising risk premium means higher costs for Spain when it seeks to raise fresh funds to finance state spending. It comes at a bad time for the government, which plans to raise 2.5-3.5 billion euros in a bond auction on Thursday. But Hugh said the danger could be greater for Spanish banks, which use government bonds as collateral to get short-term financing on the London financial markets instead of running to the European Central Bank. Many Spanish banks depended on London\'s LCH Clearnet clearing house for short-term financing, he said. But once the risk premium on Spanish bonds reaches 450 points, the clearing house may issue a demand for an extra 15 percent margin from the banks, as it had done with both Portugal and Ireland, he said. \"What does that mean? It means that they have to post more collateral. Since they are already very, very, very stretched it becomes too much. What Spain cannot afford is for the spread to go to 450, which it will do.\" If the risk premium reaches 450 basis points, Spanish banks could be forced to seek short-term financing from the European Central Bank which may not have the firepower to cope, Hugh said. At that point, the European Financial Stability Facility, used in the Greek, Irish and Portuguese bailouts, may be asked to step in. \"That is all maybe August, maximum September before we get there at this rate -- it could be next week.\"  

arabstoday
arabstoday

Name *

E-mail *

Comment Title*

Comment *

: Characters Left

Mandatory *

Terms of use

Publishing Terms: Not to offend the author, or to persons or sanctities or attacking religions or divine self. And stay away from sectarian and racial incitement and insults.

I agree with the Terms of Use

Security Code*

spanish pm delays holiday as risk premium hits record spanish pm delays holiday as risk premium hits record

 



Name *

E-mail *

Comment Title*

Comment *

: Characters Left

Mandatory *

Terms of use

Publishing Terms: Not to offend the author, or to persons or sanctities or attacking religions or divine self. And stay away from sectarian and racial incitement and insults.

I agree with the Terms of Use

Security Code*

spanish pm delays holiday as risk premium hits record spanish pm delays holiday as risk premium hits record

 



Arab Today, arab today
Arab Today, arab today Skincare PR Performance Full Year 2017

GMT 10:35 2018 Monday ,22 January

Skincare PR Performance Full Year 2017
Arab Today, arab today New hunt for flight MH370 gets under way

GMT 02:36 2018 Wednesday ,24 January

New hunt for flight MH370 gets under way
Arab Today, arab today Modern colorful bedroom renovation

GMT 11:23 2017 Thursday ,21 December

Modern colorful bedroom renovation
Arab Today, arab today France sanctions businesses linked

GMT 01:58 2018 Wednesday ,24 January

France sanctions businesses linked
Arab Today, arab today Turkey detains dozens more

GMT 02:09 2018 Wednesday ,24 January

Turkey detains dozens more
Arab Today, arab today
Arab Today, arab today

GMT 07:22 2017 Thursday ,23 November

Zimbabwe's next leader heads home after Mugabe exit

GMT 07:23 2017 Thursday ,23 November

Zimbabwe's next leader heads home after Mugabe exit

GMT 20:34 2018 Saturday ,20 January

Bahrain press headlines

GMT 22:38 2018 Tuesday ,23 January

Bahrain Press headlines

GMT 16:25 2016 Thursday ,22 December

Italian bank Monte Paschi edges closer to state bailout

GMT 06:03 2014 Wednesday ,09 April

Please .. Let Gaza breathe!

GMT 09:12 2017 Friday ,17 November

Gleam Futures represents Grace Beverley

GMT 04:18 2017 Sunday ,26 November

Bella magazine appoints celebrity writer

GMT 06:00 2017 Sunday ,29 October

Childrenswear brand Once appoints Dyelog

GMT 16:33 2014 Thursday ,13 November

Al-Ehtimam Bil Aakhareen

GMT 03:34 2017 Sunday ,05 November

Needle & Thread relocates press office

GMT 14:56 2017 Thursday ,21 December

Ryanair says formally recognises pilots' union

GMT 01:41 2017 Saturday ,12 August

Moroccan video sparks debate on sexual harassment
Arab Today, arab today
Arab Today, arab today
 
 Arab Today Facebook,arab today facebook  Arab Today Twitter,arab today twitter Arab Today Rss,arab today rss  Arab Today Youtube,arab today youtube  Arab Today Youtube,arab today youtube
arabstoday arabstoday arabstoday arabstoday
arabstoday arabstoday arabstoday
arabstoday
بناية النخيل - رأس النبع _ خلف السفارة الفرنسية _بيروت - لبنان
arabstoday, Arabstoday, Arabstoday