What Bailout? Spain's Debt Costs Skyrocket

Spain's bank bailout hasn't exactly put the markets at ease—indeed, it may have done the opposite. Spain's 10-year borrowing costs closed at a euro-era high of 6.72% yesterday, the Wall Street Journal reports. Indeed, bond yields rose across Europe, with Italy's hitting 6.26%, its highest level in a year. "We're in very precarious times yet again," said an economist at the World Bank, which yesterday slashed its global growth forecast to 2.5%.

The pessimism comes despite what Henry Blodget of Business Insider calls a "sweetheart bailout" for Spain's banks. If the rumors circulating are true, Spain won't have to make any payments until 2017, and will pay just 3% on the loans—even as the banks repay it at 8.5%. The European Commission had promised that the bailout would be made on lender-friendly terms, but "that," Blodget observes, "appears to have been a crock." (More Spain stories.)