SPAIN: Spain's risk premium shoots up to a euro zone record high as Prime Minister Mariano Rajoy defends austerity measures

Record ID: 861194

  • Title: SPAIN: Spain's risk premium shoots up to a euro zone record high as Prime Minister Mariano Rajoy defends austerity measures
  • Date: 17th May 2012
  • Summary: MADRID, SPAIN (MAY 16, 2012) (REUTERS) BOARD TRADER ON PHONE
  • Embargoed: 1st June 2012 13:00
  • Keywords:
  • Location: Spain
  • City:
  • Country: Spain
  • Topics: Economy,Politics
  • Reuters ID: LVA6D4KNGYLFH2H3WZFN5VA9KY8H
  • Aspect Ratio:
  • Story Text: Spain's risk premium, as measured by the spread on yields between Spanish and German benchmark debt, rose on Wednesday (May 12) to more than 500 basis points, a record high in the euro area, as investor concerns mounted over contagion as a result of worries about Greece's future in the single currency.
    "The situation, as you say, is very difficult, it's very complicated, the risk premium has increased a lot and that means it's very difficult to finance oneself, it's very difficult to do it at reasonable price," Spanish Prime Minister Mariano Rajoy told reporters following his intervention in parliament.
    Spain has been facing increasing pressure form markets as investors fear Spain could be the next euro zone country to seek aid.
    Rajoy has also been facing pressure form the electorate as his government has embarked in deep austerity measures, many of which he said he would never carry out when he was campaigning last November ahead of a general election that gave him a landslide victory.
    The Spanish prime minister however, amid a debate in Europe about the worthiness of austerity measures, defended his government's policies and the euro project.
    "Yes to austerity and to growth but I would also like to add a clear and strong message in defence of the euro project and the affirmation of the sustainability of the public debt of all European countries which are this moment are subject to discussion," he said to reporters.
    Rajoy also said it would be a "major mistake" if Greece were to leave the euro common currency zone.
    "I don't want Greece to leave the euro. I think it would be a major error, it would be very bad news and I believe we have to guarantee the sustainability of the public debt and then we must all comply with our commitments which is what we are doing in Spain, what Italy is trying to do and what the rest of the countries are trying to do," Rajoy said.
  • Copyright Holder: REUTERS
  • Copyright Notice: (c) Copyright Thomson Reuters 2012. Open For Restrictions - http://about.reuters.com/fulllegal.asp
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