Spanish Economy Minister Luis de Guindos said euro-area finance ministers meeting in Brussels must deliver a united response on Greece to prevent the region’s debt crisis from engulfing Spain.
“Europe is going through a complicated moment, especially in relation to Greece,” de Guindos told reporters in Brussels before the finance ministers met today. “What we need is the cooperation of the whole of the euro zone” and “we hope that will be the case at the Eurogroup summit tonight.”
The yield on Spain’s 10-year benchmark bond jumped 22 basis points to 6.23 percent today amid concern over the nation’s banks and as Greece moved closer to an exit from the euro area following inconclusive elections on May 6.
De Guindos said Spain is being punished as markets react to political instability that may prevent Greece from complying with its bailout commitments. “This is the fundamental decision we have to take in the coming hours in the Eurogroup and I hope the Eurogroup will give a significant response,” he said.
The Spanish Treasury today offered the most since December to sell investors 2.9 billion euros ($3.7 billion) of bills as demand eased after Prime Minister Mariano Rajoy’s government last week said it may inject public funds into struggling banks.
Spanish Foreign Minister Jose Manuel Garcia Margallo said the increase in Spain’s borrowing costs was due to the situation in Greece, not its banking sector.
“The problem with being so integrated in an economic and monetary union is that you make absolutely all the efforts asked of you, including efforts as painful as those made by this government since its first day in power, and any outside event can sterilize those efforts,” Margallo told reporters in Brussels.