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Economic minister refuses to rule out Spanish bailout

The European debt crisis is again the focus of global financial markets as Spanish and Italian government bonds are increasingly being avoided by investors, while political instability in Greece threatens a deal that temporarily stabilised financial markets.

Spain and Italy’s government bond yields have risen over the past few days, sparking stock market falls all over the world.

Spanish 10-year bond yields reached 5.99% overnight, as the country’s unemployment rate hovers at 23%.

Spain’s debt has grown from 68% of gross domestic product (GDP) to 78% in the past 12 months.

Spanish Economy Minister Luis de Guindos declined to rule out requesting a bailout, and Bank of Spain governor Miguel Angel Fernandez Ordonez said the nation’s lenders could need more capital if the economy weakened more than expected.

Spanish Prime Minister Mariano Rajoy announced 10 billion euros in budget cuts overnight.

In Greece, the main political parties that voted for the deeply unpopular bailout and budget cuts could face a snap election as early May 6, which could affect the temporary solution to the Greek debt crisis.

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