According to the Telegraph’s Ambrose Evans-Pritchard: Police
riots run after demonstrators protest against austerity measures announced by
the Spanish government in Madrid, Spain, Thursday July 19, 2012. Concerns over
Spain's attempts to restore market confidence in its economy resurfaced
Thursday after a bond auction went poorly and its borrowing costs edged higher
- even as the country's Parliament passed the latest round of harsh austerity
measures designed to cut its bloated deficit.
Spain is battling to avert a fully-fledged sovereign rescue
after borrowing costs spiralled out of control, with dangerous knock-on effects
in Italy and Eastern Europe.
The yields on closely-watched two-year debt surged by 78
basis points to a modern-era high of 6.42pc, leaving it unclear how long the
country can continue funding itself. Italy’s two-year yields vaulted to 4.6pc.
“We can’t keep going like this for another 15 days,” said
Prof Miguel Angel Bernal from Madrid’s Institute of Market Studies. “The
European Central Bank has to bring out its heavy artillery.”
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