June 18 (Bloomberg) -- Spanish Budget Minister Cristobal Montoro called on the European Central Bank to prop up the nation’s bond market as yields surged beyond the 7 percent level that prompted bailouts in other euro nations.
“The ECB should respond with all firmness,” Montoro told lawmakers in the Senate in Madrid today, echoing a call made by other members of the government. Doubts that remain about the currency region that need to be eliminated, he said.
Spain’s 10-year bond yield rose to a euro-era record of 7.15 percent today as the positive impact of the Greek election result faded after about an hour of trading. Spain agreed to a 100 billion-euro ($126 billion) bailout for its banks on June 9, and its borrowing costs have continued to rise amid speculation the government will have to come back for a full rescue.
Montoro said Spain backs more fiscal and political union in the 17-nation euro area as well as a so-called banking union. The government has chosen the “path of responsibility” and will meet its budget-deficit targets, he said.
Spain aims for a budget gap of 5.3 percent of gross domestic product this year, compared with 8.9 percent in 2011, even as the economy suffers its second recession since 2009.
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