Investors shift fears on debt to Spain, France
Borrowing costs reach high levels
Italy, the third-largest economy of the euro bloc, has spent days struggling in the market spotlight. Yesterday, however, investors turned their attention to the number two, France, and number four, Spain, whose borrowing costs spiked during the day. Spain auctioned about 3.6 billion euros, or $4.8 billion, in 10-year debt yesterday, but had to pay 6.97 percent - the most it has had to pay since 1997, before the advent of the euro, and well above the 5.43 percent it paid at a comparable auction in October. Borrowing costs above 6 percent are considered dangerously high, and at 7 percent are considered unsustainable over the longer term, as interest payments crowd out other spending.