European Central Bank rate-setters faced protests in Barcelona today as markets heaped more pressure on Spain in its first debt sale since Standard & Poor’s slashed its credit rating last week.
The ECB, making one of its twice-yearly trips outside its Frankfurt HQ, was greeted in the Catalonian capital by demonstrators protesting against harsh austerity measures.
Prime minister Mariano Rajoy, who is bidding to convince nervous investors it can avoid a catastrophic bailout, raised €2.5 billion in three and five-year debt today, but borrowing costs soared. The nation is paying 4.75% to borrow for five years, up from 3.56% in February. The ECB is under pressure to restart its sovereign bond-buying programme launched last summer to ease the strain on Madrid. Nick Spiro of Spiro Sovereign Strategy said: “Demand is still there… but at an increasingly steep price for the [Spanish] Treasury.”
