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.
TEXT SIZE - +
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

Algerians Vote in Presidential Election

There were few media reports of protests and clashes around the country, but so far no significant violence More

Sharks More Evolved than Previously Thought

The discovery could “profoundly affect our understanding of evolutionary history” More

Pakistan Military Asked to Protect Polio Workers

Request comes as authorities say a Taliban ban on vaccinations in 2012 and deadly attacks on anti-polio teams have prevented thousands of children from getting inoculated 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.
Google Buys Drone Companyi
|| 0:00:00
...
 
🔇
X
George Putic
April 15, 2014
In its latest purchase of high-tech companies, Google has acquired a manufacturer of solar-powered drones that can stay in the air almost indefinitely, relaying broadband Internet connection to remote areas. It is seen as yet another step in the U.S. based Web giant’s bid to bring Internet to the whole world. VOA’s George Putic reports.
Video

Video Google Buys Drone Company

In its latest purchase of high-tech companies, Google has acquired a manufacturer of solar-powered drones that can stay in the air almost indefinitely, relaying broadband Internet connection to remote areas. It is seen as yet another step in the U.S. based Web giant’s bid to bring Internet to the whole world. VOA’s George Putic reports.
Video

Video Ray Bonneville Sings the Blues and More on New CD

Singer/songwriter Ray Bonneville has released a new CD called “Easy Gone” with music that reflects his musical and personal journey from French-speaking Canada to his current home in Austin,Texas. The eclectic artist’s fan base extends from Texas to various parts of North America and Europe. VOA’s Greg Flakus reports from Austin.
Video

Video Millions Labor in Pakistan's Informal Economy

The World Bank says that in Pakistan, roughly 70 percent work in the so-called informal sector, a part of the economy that is unregulated and untaxed. VOA's Sharon Behn reports from Islamabad on how the informal sector impact's the Pakistani economy.
Video

Video Passover Celebrates Liberation from Bondage

Jewish people around the world are celebrating Passover, a commemoration of their liberation from slavery in Egypt more than 3,300 years ago. According to scripture, God helped the Jews, led by Moses, escape bondage in Egypt and cross the Red Sea into the desert. Zlatica Hoke reports that the story of the Jewish Exodus resonates with other people trying to escape slave-like conditions.
Video

Video Police Pursue Hate Crime Charges Against Kansas Shooting Suspect

Prosecutors are sifting through the evidence in the wake of Sunday’s shootings in a suburb of Kansas City, Missouri that left three people dead. A suspect in the shootings taken into custody is a white supremacist. As VOA’s Kane Farabaugh reports, he was well-known to law enforcement agencies and human rights groups alike.
Video

Video In Eastern Ukraine, Pro-unity Activists Emerge from Shadows

Amid the pro-Russian uprisings in eastern Ukraine, there is a large body of activists who support Ukrainian unity and reject Russian intervention. Their activities have remained largely underground, but they are preparing to take on their pro-Moscow opponents, as Henry Ridgwell reports from the eastern city of Donetsk.
Video

Video Basket Maker’s Skills Have World Reach

A prestigious craft show in the U.S. capital offers one-of-a-kind creations by more than 120 artists working in a variety of media. As VOA’s Julie Taboh reports from Washington, one artist lucky enough to be selected says sharing her skills with women overseas is just as significant.
Video

Video UN Report Urges Speedier Action to Avoid Climate Disaster

A new United Nations report says the world must switch from fossil fuels to cleaner energy sources to control the effects of climate change. The Intergovernmental Panel on Climate Change released the report (Sunday) following a meeting of scientists and government representatives in Berlin. The comprehensive review follows two recent IPCC reports that detail the certainty of climate change, its impacts and in this most recent report what to do about it. VOA’s Rosanne Skirble has the details.
AppleAndroid