PROSPECTS of a multi-billion euro bailout for Spain increased as the country’s borrowing costs edged up on fears over its beleaguered banking sector.
The yield on Spanish 10-year bonds rose to 6.6% – close to levels which pushed Greece, Portugal and Ireland into taking financial help from the European Union.
Spain’s woes snowballed as a plan to shore up the finances of its troubled lender Bankia by indirectly tapping the continent’s central bank for support was rejected.
The escalating eurozone crisis spooked investors as London’s FTSE 100 Index closed down by 93.86 at 5297.28. Germany’s Dax and France’s Cac-40 were almost 2% down.