Spanish shares slump

Share prices on the Madrid stock market plunged to their lowest level in nine years on Monday due mainly to traders' concerns about the Spanish bank Bankia.

At one point the lender's shares had lost 29 percent of their value, but they bounced back later in the day to close down by just over 13 percent. This followed the bank's announcement on Friday that it planned to seek another 19 billion euros ($23.8 billion) in government assistance. That amount is in addition to the 4.5 billion the Spanish government has already pumped into the bank, which was created through a merger of seven regional lenders in 2010.

Also on Monday, Spain's 10-year borrowing costs rose by 0.16 percentage points to almost 6.45 percent. Seven percent is considered unsustainable in the long term and the fact that Spain is approaching that level has raised concerns that it could soon be forced to join the ranks of Greece, Ireland and Portugal by seeking an international bailout.

Good ideas needed

Conservative Prime Minister Mariano Rajoy, though, rejected the prospect of Spain having to seek outside help and blamed the higher borrowing costs on general uncertainty about Europe's single currency.

"There are major doubts over the eurozone and that makes the risk premium for some countries very high. That's why it would be a very good idea to deliver a clear message there's no going back for the euro," Rajoy told reporters in Madrid. "There will not be any (European) rescue for the Spanish banking system," he added.

The government said last week its regions faced 36 billion euros of refinancing for debt this year, far higher than the previously stated 8 billion euros.

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