Spanish Budget Minister Cristobal Montoro called on the European Central Bank to prop up the nation’s bond market as yields surged beyond the 7 percent level that prompted bailouts in other euro nations.
“The ECB should respond with all firmness,” Montoro told lawmakers in the Senate in Madrid today, echoing a call made by other members of the government. Doubts that remain about the currency region that need to be eliminated, he said.
Spain’s 10-year bond yield rose to a euro-era record of 7.15 percent today as the positive impact of the Greek election result faded after about an hour of trading. Spain agreed to a 100 billion-euro ($126 billion) bailout for its banks on June 9, and its borrowing costs have continued to rise amid speculation the government will have to come back for a full rescue.
Montoro said Spain backs more fiscal and political union in the 17-nation euro area as well as a so-called banking union. The government has chosen the “path of responsibility” and will meet its budget-deficit targets, he said.
Spain aims for a budget gap of 5.3 percent of gross domestic product this year, compared with 8.9 percent in 2011, even as the economy suffers its second recession since 2009.
To contact the reporter on this story: Emma Ross-Thomas in Madrid at email@example.com
To contact the editor responsible for this story: Craig Stirling at firstname.lastname@example.org