Summary Box: Spain borrowing costs fall

AP News
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Posted: Dec 20, 2011 10:15 AM
Summary Box: Spain borrowing costs fall

INVESTOR INTEREST: Spain saw its borrowing costs plummet in a debt auction, indicating renewed market confidence in its ability to handle its debt. Investors demanded an interest rate of only 1.74 percent to lend the government 3-month money, down sharply from 5.1 percent in the last such auction on Nov. 22.

TAKING CARE OF BUSINESS: Short-term credit conditions have eased significantly in recent weeks, helped by the European Central Bank's offer of ultra-cheap loans to the financial sector as well as the promise by eurozone governments to accept tighter controls on their budgets.

MORE CUTS COMING: Spain has already made sharp cuts to its national spending to convince bond investors it will remain solvent despite the turmoil in European financial markets _ and more austerity moves are in the works.