Spain’s borrowing rate soars

MADRID - Agence France-Presse

Spain’s borrowing rate nearly doubled in a short-term debt auction yesterday as investors fretted over the eurozone’s determination to deal with its debts.

The treasury raised 1.933 billion euros ($2.5 billion) but the timing could hardly have been worse, with financial markets slumping on concern that Europeans are wavering in their commitment to austerity.

The sale of three-month and six-month bills came a day after Spain’s central bank declared the country had plunged back into recession in the first quarter of 2012. Markets were shaken after a first round of French presidential elections on April 22 put Francois Hollande, who wants the eurozone to focus on growth rather than austerity, ahead of incumbent Nicolas Sarkozy.