Reuters: Spain extremely worried by impact of deadlocked Italy vote

26 February 2013

Spain said it was extremely worried about the impact of Italy's deadlocked election result, warning the deadlock could affect the entire eurozone.

Foreign Minister José Manuel Garcia-Margallo said there was a feeling of "extreme concern" over possible movements in bond spreads as a reaction to the results. "This is a jump to nowhere that does not bode well either for Italy or for Europe", Garcia-Margallo said. The Spanish government said it was monitoring the situation, especially the fallout on financial markets as the premium investors demand to hold Spanish 10-year debt.

Economy Minister Luis de Guindos said Spain had a strong liquidity position and could cope with market jitters after the Spanish Treasury sold close to €11 billion of debt last week. "We will see how the situation evolves. We hope there will be a stable government. What is good for Italy is good for Spain", de Guindos said.

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