Spain to Borrow $267 Billion of Debt

 

Spain to Borrow $267 Billion of Debt Amid Rescue Pressure

Spain to Borrow $267 Billion of Debt Amid Rescue Pressure

Spain plans to borrow 207.2 billion euros ($266.5 billion) next year, the Budget Ministry said today, as pressure builds for Prime Minister Mariano Rajoy to tap the European rescue fund instead of financial markets. Spain’s debt will widen to 90.5 percent of gross domestic product in 2013 as the state absorbs the cost of bailing out its banks, the power system and euro-region partners Greece, Ireland and Portugal. This year’s budget deficit will be 7.4 percent of economic output, Budget Minister Cristobal Montoro said at a press conference. Spain’s 6.3 percent target will be met because it can exclude the cost of the bank rescue, he said. Spain’s borrowing plans may test investors’ willingness to continue financing the government with the European Central Bank waiting to buy the country’s debt should Rajoy agree to conditions. The government this past week unveiled 43 measures designed to boost economic growth that Economic and Monetary Affairs Commissioner Olli Rehn said go beyond the European Union’s recommendation for Spain’s restructuring. The budget “seemed to be an indication that Spain would be asking for some official financing soon,” Megan Greene, director of European economics at Roubini Global Economics LLC, said in a Bloomberg radio interview Sept. 28. “There’s huge political pressure on Spain already.”

 

 

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