Spain borrowing rate hits 7 per cent ahead of eurozone meeting on bank rescue package

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Spanish Finance Minister Luis de Guindos Jurado, right, talks with President of the European Central Bank Mario Draghi during the Eurogroup ministerial meeting at the European Council building in Brussels, Monday, July 9, 2012. European finance ministers are to use this week\'s meetings in Brussels to attempt to secure Spain\'s teetering economy, with progress expected on the bailout loan for the country\'s stricken banks and a relaxation of the government\'s financial targets. (AP Photo/Yves Logghe)

MADRID – Spain’s borrowing costs on its benchmark 10-year bond hit 7 per cent as finance ministers of the 17 countries that use the euro gather in Brussels to discuss terms of a rescue package for the country’s banks.

The interest rate on the country’s rose 0.13 per cent Monday morning to a level that market-watchers consider is unaffordable for a country to raise money on the bond markets in the long term.

Spanish officials have said that the finance ministers’ meeting could decide how much money the country’s stricken banks need from a lifeline of up to €100 billion ($124 billion). Investors fear a full-blown bailout of Spanish public finances would be too large to handle. The country’s economy is the eurozone’s fourth-largest and is larger than Portugal, Ireland and Greece combined.

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Abbey Westbury

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