Uncertainty lingers in Spain after bond auction

Spanish Prime Minister Mariano Rajoy during a press conference in Madrid on May 28, 2012. The Spanish government raised $2.6 billion in a bond auction this morning.

David Brancaccio: There are signs European leaders are pulling together some kind of limited rescue of Spanish banks. That's one of the reasons stock markets have been so cheery over the last day. And the Spanish government was able to sell nearly $3 billion dollars in bonds, although it had to offer higher interest rates to get that done.

The BBC's Tom Burridge reports from Madrid.


Tom Burridge: $2.6 billion is a relatively small amount of government debt, but the sale was seen as something of a report card on worries over Spain's economy. So the successful auction is a passing grade, but maybe not an 'A' because the higher interest rate of 6.1 percent shows that investors are still concerned that Spain has not wiped their hands clean of the financial mess just yet.

Victor Rodriguez is a Madrid based businessman. He says he is still confident that Spain will sort out the problems in its banking sector and that his finances are secure.

Victor Rodriguez: We are keeping an eye on what is happening with national banks, but we see Europe, we see Spain backing up banks and making sure our deposit, our investments are safe.

But there are still rumors -- so far denied by the Spanish Government -- that the country will have to seek some form of international assistance for the country's banks.

In Madrid, I'm the BBC's Tom Burridge for Marketplace.

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