Sept. 18 - Investors pile pressure on Spain to request aid and trigger an ECB bond-buying programme as the 10-year benchmark bond rises above 6 percent. Sonia Legg reports.
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It was the end of a two week rally sparked by the ECB's new bond-buying plan - Spain's Ibex lost almost two percent.
A key sale of 10-year bonds triggered the fall - yields topped six per cent suggesting Madrid won't be able to finance itself at reasonable levels without seeking a bailout.
Nick Beecrcoft is from Saxo bank.
(SOUNDBITE) (English): NICK BEECROFT, Chairman & Senior Market Analyst, Saxo Bank, SAYING:
"It seems pretty self-evident that Spain will need some form of assistance and it is juts the politics that is getting in the way. Premier Rajoy wants to if you like negotiate a little conditionality as possible and I am sure that is what is happening behind the scenes."
Spain is at the centre of the euro zone debt crisis.
Investors fear Madrid won't be able to reduce its massive public debt deficit or control its soaring debt levels.
It's already asked for a 100 billion euro loan for its banks - and returning to economic growth without further international support is looking increasing unlikely
For many only the timing of a request is uncertain.
And that, says the Economy Professor at Madrid Business School, is down to politics.
(SOUNDBITE)(Spanish) ECONOMY PROFESSOR AT MADRID'S BUSINESS SCHOOL, RAFAEL PAMPILLON, SAYING:
"Politicians don't always look at what's best for their country or the state, politicians want to remain in power. They look at electoral efficiency and the results of October's elections in Galicia and the Basque country will depend on whether there is a request for aid."
Spain's Treasury will take comfort from the fact that it sold more than its target although a further sale on Thursday could prove more damaging.
Either way the Prime Minister's cautious style isn't winning much support.
Rajoy's popularity has plummeted.
He's also under mounting pressure from the business community and credit ratings agencies are circling.
Sonia Legg, Reuters.
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