Madrid: Spanish Finance Minister Elena Salgado said there's "absolutely" no risk the country will need an international bailout as its borrowing costs compared with Germany's surged to a euro-era record.
Asked in an interview on Punto Radio in Madrid if Spain risked having to seek a rescue like Ireland or Greece, Salgado said "absolutely not". The euro faces "speculative attacks" which Spain is in the "best conditions to resist", she said.
Spain's 10-year bond yield surged 20 basis points to 5.12 per cent, pushing the spread over German bunds to the widest since the euro was created in 1999, as Ireland's bailout prompted speculation that Portugal and Spain may also need help. Irish yields jumped 28 basis points to 8.93 per cent after the nation's credit rating was cut two levels by Standard & Poor's, and Portuguese yields rose 26 basis points to 7.32 per cent.
Ireland this week became the first nation to seek to tap the euro region's 750 billion-euro (Dh3.67 trillion) rescue fund that was set up in May after Greece's near-default.
Ireland asked for help after the cost of saving its financial industry swelled the budget deficit to an estimated 32 per cent of gross domestic product, 10 times the European Union's limit.
"Our financial sector has always had the Bank of Spain's supervision and regulation, which is what has probably been missing in Ireland," Salgado said yesterday.
"We have a solid financial sector, and we should remember that it's the fin-ancial sector that's provoking the difficult situation in Ireland."
