Portugal, Spain Hit by Investor Fears Over Debt

From the Washington Times:

Portuguese and Spanish borrowing costs rose sharply Wednesday as investors worried that the governments’ debt loads will prove unsustainable, putting them next in line for a European bailout, and as a major public sector strike hit Portugal.

The interest rate on Portugal‘s 10-year bonds broke through the 7 percent barrier before easing slightly. The equivalent Spanish bond yield rose to 5.08 percent at mid-morning from 4.91 percent at the start of trading. By contrast, 10-year yields for Germany — considered the benchmark — were only 2.7 percent.

Neither Iberian country is at immediate risk of bankruptcy as Portugalhas no major bond sale before January and the borrowing rate forSpain, which has two auctions before the new year, is still manageable. But the rates make already heavy debt loads more expensive to finance.

Read the rest here.

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