News / Europe

Spain Raises $2.6 Billion on Bond Market

A trader looks at his screens during a bond auction on a trading floor in Madrid, June 7, 2012.
A trader looks at his screens during a bond auction on a trading floor in Madrid, June 7, 2012.
Lisa Bryant
Jitters about Spain's financial crisis eased slightly after Madrid raised roughly $2.62 billion from a bond-market sale, although at high interest rates. But there are more worrying signs for the eurozone, including a rise in French unemployment.

Spain's successful bond sale shows Madrid can still access credit markets. But the high interest rates underscored investor fears about the country's troubled banking sector.

However, European leaders may be closing in on a rescue agreement for Spanish banks. An analyst for the Brussels-based Bruegel research organization, Shahin Vallee, believes a deal may be reached within days, although the details may not be announced until the next European Union summit later this month.

"The fact that everybody is coming to terms with the idea that financial assistance is needed is a positive development. The disagreement between Paris and Berlin are probably on the amount and also on the use of the money," said Vallee.

Germany tough on conditions

Germany, Europe's largest economy, will likely want tough bailout terms for Spain that will include close oversight. Vallee says France will be pushing for a broader restructuring of Europe's banking system.

Spain has not yet asked for EU aid. Spanish officials are determined to avoid the same stringent conditions that lenders imposed in bailing out Greece, Portugal and Ireland. Analysts say Madrid holds a bargaining chip - as the eurozone's fourth-largest economy, its collapse would be disastrous for the 17-member currency union. 

Pressure is on for European leaders to act swiftly to resolve the Spanish crisis and the larger eurozone debt problems. That message was delivered by the European Central Bank this week, when it left its main interest rate unchanged at 1 percent.

At a news conference, ECB chief Mario Draghi said monetary policy is not enough to address the eurozone crisis.

"We have seen that this crisis is the product of many many factors," he said. "Some have their roots in their national government policies.  Others have their roots in the fact that our integration process has reached a point where it has to question itself and decide whether it wants to move further or not."

French unemployment

More worrying economic news came from France, Europe's second-largest economy. Newly posted figures show unemployment at 10 percent - a 12-year high. 

But analyst Vallee believes newly elected President Francois Hollande, who has been promoting growth as a key solution for Europe's woes, has some breathing room.

"I think France really has a number of domestic policy issues to deal with. But if Hollande contributes positively to solving the European crisis, I think he can buy some time before delivering important structural reforms in France," said Vallee.

For Spain, the next key test may come Monday, when the International Monetary Fund issues a report and independent audit of its banking sector.

You May Like

FIFA Indictments Put Gold Cup Tournament Under Cloud

Experts say US indictments could lead to charges of other world soccer officials, and lead to major shakeup in sport's governance More

Video Seoul Sponsors Korean Unification Fair

At a recent even in Seoul, border communities promoted benefits of increased cooperation and North Korean defectors shared stories of life since the war More

Video VOA EXCLUSIVE: Iraq President Vows to Fight IS 'Until They Are Killed or We Die'

In wide-ranging interview with VOA Persian service reporter, Fuad Masum describes conflict as new type of fight that will take time to win More

This forum has been closed.
Comments
     
There are no comments in this forum. Be first and add one

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
Expelled from Pakistan, Afghan Refugees Return to Increased Hardshipi
X
Ayesha Tanzeem
May 28, 2015 6:48 PM
Undocumented refugees returning to Afghanistan from Pakistan have no jobs, no support system, and no home return to, and international aid agencies say they and the government are overwhelmed and under-resourced. Ayesha Tanzeem has more from Kabul.
Video

Video Expelled from Pakistan, Afghan Refugees Return to Increased Hardship

Undocumented refugees returning to Afghanistan from Pakistan have no jobs, no support system, and no home return to, and international aid agencies say they and the government are overwhelmed and under-resourced. Ayesha Tanzeem has more from Kabul.
Video

Video Britain Makes Controversial Move to Crack Down on Extremism

Britain is moving to tighten controls on extremist rhetoric, even when it does not incite violence or hatred -- a move that some are concerned might unduly restrict basic freedoms. It is an issue many countries are grappling with as extremist groups gain power in the Middle East, fueled in part by donations and fighters from the West. VOA’s Al Pessin reports from London.
Video

Video Floodwaters Recede in Houston, but Rain Continues

Many parts of Texas are recovering from one of the worst natural disasters to hit the southwestern state. Heavy rains on Monday and early Tuesday caused rivers to swell in eastern and central Texas, washing away homes and killing at least 13 people. As VOA’s Greg Flakus reports from Houston, floodwaters are receding slowly in the country's fourth-largest city, and there likely is to be more rain in the coming days.
Video

Video 3D Printer Makes Replica of Iconic Sports Car

Cars with parts made by 3D printers are already on the road, but engineers are still learning about this new technology. While testing the possibility of printing an entire car, researchers at the U.S. Department of Energy recently created an electric-powered replica of an iconic sports roadster. VOA’s George Putic has more.
Video

Video Al-Shabab Recruitment Drive Still on In Kenya

The al-Shabab militants that have long battled for control of Somalia also have recruited thousands of young people in Kenya, leaving many families disconsolate. Mohammed Yusuf recently visited the Kenyan town of Isiolo, and met with relatives of those recruited, as well as a many who have helped with the recruiting.
Video

Video US Voters Seek Answers From Presidential Candidates on IS Gains

The growth of the Islamic State militant group in Iraq and Syria comes as the 2016 U.S. presidential campaign kicks off in the Midwest state of Iowa.   As VOA’s Kane Farabaugh reports, voters want to know how the candidates would handle recent militant gains in the Middle East.
Video

Video A Small Oasis on Kabul's Outskirts Provides Relief From Security Tensions

When people in Kabul want to get away from the city and relax, many choose Qargha Lake, a small resort on the outskirts of Kabul. Ayesha Tanzeem visited and talked with people about the precious oasis.
Video

Video Film Festival Looks at Indigenous Peoples, Culture Conflict

A recent Los Angeles film festival highlighted the plight of people caught between two cultures. Mike O'Sullivan has more on the the Garifuna International Film Festival, a Los Angeles forum created by a woman from Central America who wants the world to know more about her culture.
Video

Video Kenyans Lament Losing Sons to al-Shabab

There is agony, fear and lost hope in the Kenyan town of Isiolo, a key target of a new al-Shabab recruitment drive. VOA's Mohammed Yusuf visits Isiolo to speak with families and at least one man who says he was a recruiter.
Video

Video Scientists Say Plankton More Important Than Previously Thought

Tiny ocean creatures called plankton are mostly thought of as food for whales and other large marine animals, but a four-year global study discovered, among other things, that plankton are a major source of oxygen on our planet. VOA’s George Putic reports.
Video

Video Kenya’s Capital Sees Rise in Shisha Parlors

In Kenya, the smoking of shisha, a type of flavored tobacco, is the latest craze. Patrons are flocking to shisha parlors to smoke and socialize. But the practice can be addictive and harmful, though many dabblers may not realize the dangers, according to a new review. Lenny Ruvaga has more on the story for VOA from Nairobi, Kenya.
Video

Video Iowa Family's Sacrifice Shaped US Military Service for Generations

Few places in America have experienced war like Waterloo. This small town in the Midwest state of Iowa became famous during World War II not for what it accomplished, but what it lost. As VOA’s Kane Farabaugh reports, the legacy of one family’s sacrifice is still a reminder today of the real cost of war for all families on the homefront.

VOA Blogs