Spain feels the pain of Greece's debt woes
Risk premium rises, stock market falls
Spain's risk premium rose on Friday and the stock market fell as concerns mounted about Greece's solvency.
The spread between the yield on the Spanish benchmark 10-year government bond and the German equivalent widened to levels last seen in January of around 242 basis points, while the blue chip Ibex 35 fell 1.45 percent to 10,226.60 points, with the banks suffering badly. The rest of the European markets were also lower.
Fitch on Friday downgraded Greece's long-term sovereign rating to B+ from BB+ to reflect the challenges facing Greece to "secure solvency." The ratings agency expects Greece's bailout package to be increased, but added if this involves compulsory "burden sharing" by private bondholders it would "adversely impact financial stability across the euro area."
