Bond yields rise again for Spain and Italy

Market euphoria fades as 10-year bond yields rise again for Spain and Italy

Associated Press
Spanish, Italian borrowing rates rising again
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Xanty, a Mexican street artist, performs in Milan, Italy, Wednesday, July 4, 2012. Italian Premier Mario Monti has insisted Italy doesn't need a European bailout because it expects a budget surplus next year, but acknowledges work still needs to be done to cut public spending, boost economic growth and create jobs. (AP Photo/Luca Bruno)

MADRID (AP) -- The interest rates for Spain and Italy's benchmark 10-year bonds are rising sharply, signaling resurging investor concern that Europe's sovereign debt crisis is far from over.

The rate, or yield, for the Spanish bond was up 0.16 percent to a dangerous 6.9 percent at midday Friday. Such borrowing rates are deemed unsustainable over the long term and could push Spain to seek a full-blown bailout like Greece, Ireland and Portugal.

Italy's rate was up 13 basis points to 6.01 percent.

Both countries' yields fell sharply last week in a wave of euphoria following a European Union agreement to channel aid directly to troubled banks without further burdening a country's debt and making it easier for EU fund systems to buy secondary market bonds so as to ease yields.

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