France and Spain in firing line as spreads hit euro-era high

Fears of France and Spain being the next to suffer in the eurozone debt crisis intensified as 10-year bond spreads reached euro-era highs above German yields yesterday.

While Italian 10-year bond yields striking through the critical level of 7% dominated the headlines yesterday, concerns surrounding a possible euro break-up and its consequences pushed up the cost of borrowing across Europe. The spread between French and German bonds yesterday hit 1.46 percentage points - the highest level for almost 20 years and three times the gap recorded a year ago - as the borrowing cost for France reached 3.179%, the Telegraph reports. Belgium and Spain also saw spreads over German borrowing costs reach near 20-year highs. Italian yields traded 5.5% higher th...