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Spain's borrowing costs hit euro-era record Spain's borrowing costs hit 14-year high
(40 minutes later)
Spain's borrowing costs have risen at its latest bond auction, on continued fears about the eurozone debt crisis. Spain's borrowing costs have risen at its latest bond auction, as Spaniards prepare to vote for a new government to tackle its financial crisis.
The average yield on 10-year traded Spanish government bonds soared from 5.433% in October to 6.975% - a record since the euro was created in 1999. The average yield on 10-year government bonds soared from 5.433% in October to 6.975% - the highest since 1997.
A high yield indicates investors may not have confidence in the government to fully repay its debts.A high yield indicates investors may not have confidence in the government to fully repay its debts.
The figure is perilously close to 7% - the level at which other eurozone countries have had to seek bailouts.
Italian 10-year bond yields passed 7% earlier this month.
Opinion polls indicate that the opposition Popular Party will win Spain's general election on Sunday, ending seven years of Socialist government.
'Dreadful'
The Spanish government sold 3.56bn euros (£3.04bn; $4.79bn) worth of bonds out of a maximum target of 4bn euros.The Spanish government sold 3.56bn euros (£3.04bn; $4.79bn) worth of bonds out of a maximum target of 4bn euros.
A similar auction in France saw French short-term borrowing costs - for its two and five-year bonds - also rise. The auction attracted bids worth 1.5 times the securities offered. The so-called bid-to-cover ratio was down from 1.8 in October.
"The result was dreadful. They didn't manage to raise the full amount and the bid-to-cover is really poor," said Achilleas Georgolopoulos, rates strategist at Lloyds in London.
"The fiscal profiles of Spain and Italy are different but their yields seem to be aligning now."
A similar auction in France saw French short-term borrowing costs - for its two and four-year bonds - also rise by about half a percentage point.