I’m finishing a two-day trip to Spain and am about to board a plane, just as the bond markets turn their attention to the Iberian Peninsula. As James wrote yesterday, the gap between Spanish 10-year government bonds and those of Germany has widened to as much as 2.59 percentage points – the biggest gap since the introduction of the euro.
For its part, the Portuguese government said it was under no pressure from the European Central Bank or other Eurozone member-states to accept financial aid to ease its debt and deficit problems. That sounds like the noise before the defeat.
Portugal was brought to a halt yesterday by a strike in protest at the government’s spending cuts and tax rises, which aims to reduce the budget deficit from 9.3 percent of GDP to less than 3 percent by 2013.
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