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Spain's borrowing target up 8%

Tuesday, 08 Jan, 2013 - 01:38

Jan. 8 - The Spanish Treasury announces its gross bond issuance target for 2013 will be 121.3 billion euros ($159 billion), 7.6 percent more than last year. Jamie McGeever reports on whether that target is realistic.

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"No to cuts" ... and "Not for sale". Health workers in Madrid were the latest to take to the streets over plans to privatize hospitals and health centres. The unpopular measures aren't confined to the Spanish capital - prime minister Mariano Rajoy is taking tough action nationwide to cut the budget deficit. Spain's just announced its 2013 borrowing plans, which include issuing 121 billion euros of bonds. That's 8 percent more than last year, and will require investors to lend Madrid 10 billion euros a month. Michael Leister is an interest rate strategist with Commerzbank (SOUNDBITE): MICHAEL LEISTER, INTEREST RATE STRATEGIST, COMMERZBANK, SAYING (English): "The market certainly has the liquidity for that due to all the ECB policies, and given that investors are still cash-rich. But the question will indeed be how well or how smooth the supply will be taken down." Spain's borrowing costs have fallen sharply since the European Central Bank said it would do "whatever it takes" to save the euro, including buying bonds from struggling governments. Madrid's interest payments are now much more manageable. But as anger among voters continues to grow how long the relative tranquility will last isn't certain. The economy is mired in a deep recession and hobbled by a fragile banking sector. One in four people are out of work and recovery remains some way off. Rajoy is still expected to seek financial support from international lenders at some point this year - but for now austerity continues. And so do the protests.

Spain's borrowing target up 8%

Tuesday, 08 Jan, 2013 - 01:38

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