Spain and France struggled with government bond auctions on Thursday, throwing into sharp relief the threat of larger euro zone economies succumbing to the debt crisis that began in Greece and is already lapping at Italy’s shores. Madrid was forced to pay the highest borrowing costs since 1997 at a sale of 10-year bonds, with yields 1.5 points above the average paid at similar tenders this year. The euro fell on the foreign exchanges in response. Paris fared a little better, but again had to pay markedly more to shift nearly 7 billion euros of government paper. Fears that the euro zone’s second largest economy is getting sucked into the maelstrom have taken the two-year debt crisis to a new level this week.
via Spanish, French borrowing costs climb, contagion builds, IBN Live News.
