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Fri Jul 20, 2012 2:36PM
Spain’s 10-year bond yields jump to record high of 7.065 percent. (File photo)

Spain’s 10-year bond yields jump to record high of 7.065 percent. (File photo)

The interest rate on Spain’s ten-year debt bonds has raised once more, jumping above seven percent as the economy of the cash-stripped country continues to collapse. The rate climbed to a record high of 7.065 percent from a previous 6.969 percent on Thursday, first time exceeding 7.0 percent since July 9. The raise in the country’s ten-year bond yields means that the crisis-hit country must pay yet more interest to borrow on financial markets. It is the second time in less than a week that the country’s bonds jump over 7 percent, reaching unsustainable levels and sparking concerns over the future of an EU financial aid and consequently future of the country’s struggling economy and ailing banking system. The alarming increase comes as the Eurozone finance ministers are expected to approve up to USD122 billion (100 billion euros) in funds, in order to recapitalize the country’s weakened banks and bail the country out of its deteriorating financial crisis, though the details of the deal indicate that much of the fund will not come immediately. Spanish lenders need over 100 billion euros in order to control the devastating damages caused by the real estate bubble burst roughly five years ago in 2008. Spain is now in a catastrophic financial situation similar to those of Greece, Ireland and Portugal, which have been forced to seek international bailouts shortly after their bond-yields exceeded the seven percent threshold. The EU member state has been struggling with its ailing economy since the country’s collapse into recession as the result of the global financial crisis roughly five years ago. Various EU member states have been struggling with a deep economic stagnancy since the bloc’s financial crisis began about five years ago, forcing some of the most affected nations to adopt unbearable austerity measures to be eligible to get the EU bailouts. MY/JR/SS
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