Spain says hit by contagion as Monti says he will resign

December 10, 2012 - 2:59:57 pm
MADRID: Spain's government said Monday the nation was being hit by contagion after Italian Prime Minister Mario Monti said he would soon resign.


The impending departure of Monti, and the news that his predecessor Silvio Berlusconi is running for the top job, pushed European stock markets sharply down and weakened the euro.


"The help that Spain needs it that the uncertainties over the future of the euro be eliminated," Spanish Economy Minister Luis de Guindos told public radio RNE.


"Every time there are doubts, today we are seeing it, we are seeing it in the case of Italy, when doubts surface over the political stability of a nearby country such as Italy, it infects us immediately," he said.


The yield on Spanish government 10-year bonds surged above 5.6 percent in late morning trading, after opening at 5.46 percent.


Spanish 10-year bonds are now offering an extra return, or risk premium, of about 4.3 percentage points, or 430 basis points, when compared to equivalent German bonds.


Spanish stock prices also slumped, declining by nearly two percent on the Madrid stock exchange in late morning trade. (AFP)