Zapatero to delay holiday to monitor the economic crisis in Spain

Barcelona (CNA).- José Luis Rodríguez Zapatero announced on Tuesday that he will be postponing his holiday to the Doñana national park in southern Spain in order “to more closely follow” the financial situation in Spain. On Tuesday, the risk premium on the state's debt spiralled to record highs. Spain has a key Thursday bond sales, but its borrowing costs continue to increase. Recent financial developments have only served to raise the concern of international investors that Spain will become the next Eurozone state to require a bail-out from the EU and IMF.

Spanish 10 year bonds were yielding almost 6.5% on Tuesday, marginally higher that their Italian counterparts at 6.3%. This has caused concern within the international market as it is increasingly closer to the 7% point. This was the mark at which Greece, Ireland and Portugal were forced to seek bail-out, having lost the support of their investors. The encroaching anxiety that Spain will become the next country to need a financial hand out has been rejected by the European Union. A spokesperson for the Economic and Monetary Affairs of the European Commission, Chantal Hughes, has stated that the subject of financial assistance directed towards Spain is not “on the table” at present. He said that Brussels is “convinced” that the Spanish economy is “on track” to recover on its own. However, British newspaper the Financial Times has pointed to the apprehension of investors that should Spain require a bail-out, the European Union “does not have sufficient funds to deal with Italy or Spain, the eurozone’s third- and fourth-largest economies” adding further pressure to the financial situation. This comes after Zapatero called an early election for the end of November. The decision was promoted as a stabilising measure but has sent waves of doubt throughout the private market about the financial security of Spain’s future.