Spain's borrowing costs soar

[June 16, 2010]  MADRID (AP) -- Spain's borrowing costs have soared to another record amid worries over the government's finances and financial problems for banks in this troubled euro zone country.

The interest rate gap, or spread, between 10-year Spanish bonds compared to their benchmark German equivalent rose Wednesday by more than 0.10 percentage point to 2.23 percentage points. A growing gap indicates investors think Spain's debt is getting riskier.

The increase came a day after the European Union warned Spain it would have to enact more austerity measures to meet its deficit-reduction goals.

The government prepared Wednesday to approve long-awaited labor market reforms designed to encourage businesses to hire and chip away at a 20 percent jobless rate in a country that has only just crawled out of nearly two years of recession.

[Associated Press]

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