Spain Minister Push EU For Bank Action Plan
"Europe needs to say where it is going so as to ensure security," he said. "It needs to say that the euro is an irreversible project and that it's not in jeopardy."
Earlier Finance Minister Cristobal Montoro told Spain's Onda Cero radio that the high risk premium being demanded for Spain's benchmark 10-year bonds indicates "the door to the markets is not open for Spain."
Spain's borrowing costs have soared as investors become increasingly concerned the government's public finances might be overwhelmed by the cost of rescuing banks that are sitting on massive amounts of soured property investments following the bursting of a real estate bubble that once fueled the economy.
"What the yield is saying is that as a state, in brief, Spain we have a problem when it comes to accessing markets, when it comes to refinancing our debt," said Montoro.The interest rate on the 10-year bond rate was at 6.31 percent Tuesday and although down substantially from last week it was still perilously close to the levels that pushed Greece, Ireland and Portugal to ask for bailouts over the past two years. Spain is struggling with an unemployment rate of 24.4 percent, with more than 50 percent of people under 25 out of work. Despite favoring a plan that would allow its banks to seek external help, Montoro reiterated the government's conviction that Spain did not need a bailout. "The men in black will not be coming to Spain," he said in reference to international inspectors who make periodic inspection tours of countries that receive bailouts. Montoro said the amount of money needed to prop up Spain's troubled banking sector is not excessively high. "The figure is not that high, the figure is not excessive but the question is where the money would come from," said Montoro.
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