• Inability of EU to solve problems partly to blame for higher financing costs
  • Spain spread over 200 bps cannot be accepted for a long time (Spain/German 10 year spread presently at 255 bps)
  • Spain spread over 200 bps for long time would worsen financing to businesses
  • Country needs several reforms, including better economic regulation
  • If Spain meets 6% deficit target this year perspective would change significantly