EU deal eases Spanish bond pressure29/06/2012 - 10:23:31
The interest rate for Spain’s benchmark 10-year bond has edged away from the dangerously high 7% mark following an overnight European Union agreement to funnel aid directly to struggling banks instead of via the country.
The rate is an indicator of investor wariness to lend to the country. It dropped 0.45 percentage points to 6.45% early today reflecting eased concern following the pact.
Yields of around 7% indicate what the government would pay at an auction and are unsustainable over the long term.
Spain has agreed to accept up to €100bn in loans from eurozone partners to help rescue its troubled banks.
But fears mounted that making Spain responsible for repayments could push it closer to needing a sovereign bailout.
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