Spain: Debt fears

19th July 2011

 

 Spain is being forced to pay more to borrow money.

As reported in the Financial Times (paywall)

Spain's central government lacks the political tools to rein in spending by the country's heavily indebted regional governments, which will again struggle to meet their deficit targets this year, according to the rating agency Standard & Poor.

At a time when Spain's cost of borrowing has surged to euro-era highs amid an escalation of the debt crisis in the eurozone, investors in Spanish bonds have become increasingly concerned about profligacy in its powerful and decentralised regions which have debts of €115bn – about half the size of outstanding Greek debt.

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