Spain to reduce bond issue amounts for rest of 2010

26th November 2010, Comments 0 comments

Spain will issue less debt than originally planned at its remaining bond issues this year because it has covered its financing needs for 2010, Finance Minister Elena Salgado said Friday.

"The execution of the budget during the first ten months of the year has been better than expected when we drew up our calender of auctions. Or to put it another way, the state has more than enough resources to cover its expenses until the end of the year," she told a news conference after a cabient meeting.

"We have a commitment to investors, so we won't suspend any of the planned auctions from now to the end of the year but obviously as we have more than enough margin we will probably slightly reduce the volumes at each of those issues."

Spain has two more bond issues scheduled for this year, both of them in December. Its first bond issue in 2011 is scheduled for April.

For the year to date, Spain has issued 195.3 billion euros (260.5 billion dollars) in debt, the finance ministry said in a statement.

Spain's central government deficit shrank by 47.3 percent during the first 10 months of the year to 31.26 billion euros. But sceptics point out that the problems lie as much with the country's spendthrift regions, which enjoy a large degree of autonomy from Madrid.

The gap between safe-bet German 10-year bonds and comparable Spanish bonds leapt to a record 2.60 percentage points on Friday, repeating the pattern seen in Greece and Ireland just before they capitulated and turned to the European Union and the International Monetary Fund for rescue.

But Spanish Prime Minister Jose Luis Rodriguez Zapatero said during an interview with a Catalan radio station there was 'absolutely' no chance Spain would need to seek outside help to manage its finances.

© 2010 AFP

0 Comments To This Article