Spain outlines plan to slash borrowing in 2011
Spain's government will slash net borrowing from bond markets by nearly a quarter in 2011, the Treasury said Wednesday, as it fends off market fears of an Irish-style debt crisis.
Investors have shown deep concern over the annual deficit being racked up by the Spanish government and its heavy reliance on the bond markets, leading them to demand higher and higher returns.
An economic and financial rescue for Spain would be far bigger than anything seen to date in Europe: the size of its economy is twice that of Greece, Ireland and Portugal combined.
Spain’s Treasury said it had managed to cut borrowing from markets in 2010 and would do so again in 2011 because of austerity measures adopted by the government.
For the year ahead, the Treasury estimated net financing needs of 47.2 billion euros (62 billion dollars) — a decline of 24 percent from 2010.
But the figure was slightly higher than previously announced because of the country’s 3.588-billion-euro contribution to a European financial rescue for Greece.
Net bond issues in 2010 amounted to 62.1 billion euros, compared to the 76.8 million euros forecast at the start of the year, the Treasury said in a statement. It was a sharp decline from the 116.7 billion euros in net bond issues for 2009.