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Spain says Italy vote jitters 'short term'

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(GlobalPost/GlobalPost)

Spanish Economy Minister Luis de Guindos said Tuesday the risk of political stalemate in Italy after an inconclusive vote had shaken markets, but that this effect would only be "short term".

"What is good for Italy is good for Spain," the minister told a news conference, while adding that he was "convinced" that the "political will" to lead Europe out of the crisis "will prevail".

Spanish foreign minister José Manuel Garcia Margallo meanwhile marked a more pessimistic tone warning that the vote in Italy was a "leap into the unknown that promises nothing good either for Italy or for Europe."

Fears of a return of eurozone crisis rattled markets on Tuesday with borrowing rates for Spain and Italy skyrocketing in early trade before stabilising.

Italy's 10-year borrowing rate on the secondary bond market jumped to 4.93 percent before returning to 4.77 percent, up from 4.49 on Monday, at around 0930 GMT in the wake of parliamentary elections that revealed no clear winner.

The yield on Spanish 10-year debt rose to 5.59 percent before dipping back to 5.27 from 5.168 percent Monday.

On the Spanish stock market, the Ibex-35 index of leading shares fell by 2.56 percent, after having opened with a plunge of 4 percent.

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http://www.globalpost.com/dispatch/news/afp/130226/spain-says-italy-vote-jitters-short-term