The risk premium on Spanish debt rose to euro lifetime highs of over 400 basis points, prompting the country's prime minister to delay his holiday plans to monitor the latest stage of the euro zone debt crisis.
"The prime minister is delaying his departure to Donana (in Andalucia) to more closely monitor the evolution of the economic indicators," the secretary of state for communication said.
Spain's government and economy ministry are in contact with fellow European governments over the situation in the markets, particularly Germany, Italy and France, the economy ministry said.
On financial markets, the benchmark spread between 10-year Spanish bonds and German Bunds rose to euro lifetime highs of above 400 basis points before falling back.
Italian bond yields hit their highest level in the euro's 11-year lifetime, ominously reaching the same level as Spain's in a sign that Rome is overtaking Madrid as the main focus of investors' concern about debt sustainability.
Italian economy minister Giulio Tremonti called emergency talks tomorrow with the Bank of Italy, market regulator Consob and insurance authority ISVAP, ahead of a speech by prime minister Silvio Berlusconi on the crisis in parliament.
