AlHijjah 21, 1432, Nov 17, 2011, SPA -- The yield on 10-year Spanish government bonds rose Thursday to 7.09 per cent, its highest rate in 14 years, according to dpa. The auction for 3.6 billion euros (4.8 billion dollars) worth of bonds took place just four days ahead of a general election focusing on the country's economic crisis. Many Spanish analysts consider 7 per cent as a critical threshold beyond which borrowing costs could become unsustainable. The interest rate paid in a previous auction on October 20 was 5.5 per cent. The government of Prime Minister Jose Luis Rodriguez Zapatero has so far managed to ward off an international bailout by adopting drastic austerity policies. But the economy has shown few signs of recovery, with growth stalling and unemployment at a record 22 per cent. The European Commission does not expect the government to meet its target of trimming the budget deficit to 6 per cent this year from 9.2 per cent in 2010. The economic crisis is dominating Sunday's general election, which pits conservative opposition leader Mariano Rajoy against Alfredo Perez Rubalcaba, who was chosen as the candidate of Zapatero's Socialist Party after the premier decided not to seek a third term. Rajoy is expected to win the elections with an absolute majority.
