Tags: Spain | Issue | third | Less | New | Debt | 2011

Spain Hopes to Issue a Third Less New Debt in 2011

Thursday, 02 Dec 2010 12:23 PM

The sale of stakes in state assets like airports will allow Spain to issue less debt than expected next year, Economy Minister Elena Salgado said in an interview with the Financial Times published on Thursday.

The Treasury would need to issue only about 30 billion to 31 billion euros ($40.6 billion) of new debt in 2011, compared with the 45 billion euros originally envisaged, she said.

Spain said on Wednesday it would sell off stakes in airports and the state-run lottery.

"That will allow us to reduce our stock of debt," Salgado said.

Spain also said on Wednesday it would axe a jobless benefit and announced tax cuts for small businesses. These measures would promote economic growth, Salgado said.

With regards to the recent punishment of Spain's debt by markets in the days following the international bail-out of Ireland, Salgado noted Italy and Belgium as well as Spain and Portugal had been affected by market movements.

"In recent days the attacks of the markets have affected 40 percent of the euro zone in terms of gross domestic product (GDP)," she said.

"When there's a problem that affects 40 percent of euro zone GDP, it's a systemic problem, it's not a problem of one country or another."

Asked what that problem was, she replied: "A problem of governance — a common currency without a common economic policy."

The premium investors demanded to hold Spanish 10-year bonds over the German equivalent settled at around 262 basis points on Wednesday, narrowing from a euro-era record high of 307 bps hit on Tuesday.

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The sale of stakes in state assets like airports will allow Spain to issue less debt than expected next year, Economy Minister Elena Salgado said in an interview with the Financial Times published on Thursday. The Treasury would need to issue only about 30 billion to 31...
Spain,Issue,third,Less,New,Debt,2011
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2010-23-02
Thursday, 02 Dec 2010 12:23 PM
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