Eurozone Live Blog
Spain borrowing costs peak as EU ponders bank aid
Spain's medium-term borrowing costs soared to euro-era record levels at an auction on Thursday, hours before an independent audit was due to reveal how big a capital hole in Spanish banks needs to be filled by a eurozone bailout.
Eurozone finance ministers were due to discuss later in the day how to channel up to $126bn (100bn euros) in rescue loans to Spanish lenders weighed down by bad loans from a
burst property bubble. But many in the markets see the package as a mere prelude to a full bailout of the Spanish state.
Spain's financial weakness is in focus a week before a European Union summit discusses plans for closer fiscal and banking union in an effort to strengthen the euro's foundations,
after bailouts for Greece, Ireland and Portugal failed to end sovereign debt crisis.
Madrid sold 2.2bn euros in medium-term bonds, with demand stronger than at last month's auction, but yields on 5-year paper rose to a 15-year high of 6.07 per cent, a level
regarded by analysts as unaffordable for any prolonged period.