Spain Warns of Credit Freeze

Once the European debt crisis is resolved- one way or another- the focus will shift to the Western side of the pond.
California, Illinois, Michigan, and 45 other states are in just as bad of shape as Greece/Spain/Italy….and deteriorating just as rapidly, but the MSM MOPE machine dare not mention this fact.
As Jim Sinclair would say: QE will go to Infinity both here, and there.

NEW YORK (CNNMoney) — Spain’s Treasury minister appealed to European leaders for financial support Tuesday, saying the country’s credit markets are seizing up.

The yield on Spain’s 10-year bond has been flirting dangerously close to the 7% mark that smacks of default anxiety. Over the past week, the 10-year yield has been at its highest level since November.

Treasury Minister Cristobal Montoro told Spanish radio station Onda Cero that it is “technically impossible” for Spain to bail itself out. He said that Spain needs to get more money to improve its debt situation to open the bond markets back up so people can invest in the country.

“The risk premium says Spain doesn’t have the market door open,” said Montoro. “The risk premium says that as a state we have a problem in accessing markets, when we need to refinance our debt.”

Economists estimate that the Spanish government has about €800 billion in outstanding debt.

Meanwhile, the European Stability Mechanism, a bailout fund that comes into effect this summer, will be equipped with only €500 billion.

Spain, the new epicenter of Europe’s woes

Montoro said that Spain wants “to continue being part of the [eurozone] and must bet on the European institutions” to financially support the fiscally troubled Iberian nation.

The extent of Spain’s fiscal troubles were unveiled in May, when the government announced a €19 billion rescue of Bankia, one of Spain’s top lenders.
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