Spain Cash-Starved States Nudge Rajoy Toward Rescue: Euro Credit
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Spain’s regions are adding to pressure on Prime Minister Mariano Rajoy to seek a European bailout as the funding needs of the country’s cash-strapped states swamp government expectations.
Nine of the 17 states have already requested support worth 93 percent of Spain’s 18 billion-euro ($23 billion) regional rescue fund, known as FLA. While the 10-year Spanish bond yield has fallen 251 basis points from a euro-era record of 7.75 percent on July 25, most of the states remain shut out of markets, forcing the government to weigh the cost of extending the rescue facility for another year.