Fears push up Spain borrowing costs
SPAIN has paid sharply higher interest rates to raise 2.5 billion euro (£2 billion) in a medium-term debt auction, reflecting fears it will be caught up in the fallout of the Greek crisis. Meanwhile a recently nationalised Spanish bank’s shares plummeted after a newspaper said depositors were rushing to withdraw money. Investors worry that a messy Greek exit from the currency bloc could destabilise Spain’s financial sector. The concern is that the banking sector might not be able to meet tough new provisioning requirements and require bailouts if concerns about their stability worsen.