Spain's borrowing costs soar amid fears of debt crisis contagion

 

Spain's borrowing costs have soared in a sale of 3 and 6-month bills amid fears the country could be affected by the spreading debt crisis.

The central bank says the treasury was obliged to pay 1.7 percent in average interest to sell euro2.1 billion in 3-month bills, nearly double the 0.95 percent rate paid in the last such auction Oct. 26

The rate for the sale of euro1.2 billion in 6-month bills jumped to 2.1 percent from 1.3 percent in October.

The auction Tuesday came as Madrid's Ibex 35 bourse dipped for the second day in a row amid concerns over Spain's ability to handle its debt in the wake of European Union's bailout of Ireland.