Has Spain passed the point of no return?

Spain's borrowing costs have passed what many people see as the 'point of no return'. So is a default now inevitable? Matthew Partridge investigates.

Any relief over the Greek elections earlier this week completely bypassed the Spanish bond market. The ten-year yield on Spain's bonds went above 7% earlier this week, the level which many view as "the point of no return".

The cost of insuring against a Spanish default in the next five years also increased, and is now over 600bps. Yesterday's auction of Spanish bonds also went badly. Although the government sold its stated target of $3bn, it did so at sky-high interest rates. Indeed, the rate on one-year bonds was over 2% higher than it was a month ago.

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Dr Matthew Partridge
Shares editor, MoneyWeek

Matthew graduated from the University of Durham in 2004; he then gained an MSc, followed by a PhD at the London School of Economics.

He has previously written for a wide range of publications, including the Guardian and the Economist, and also helped to run a newsletter on terrorism. He has spent time at Lehman Brothers, Citigroup and the consultancy Lombard Street Research.

Matthew is the author of Superinvestors: Lessons from the greatest investors in history, published by Harriman House, which has been translated into several languages. His second book, Investing Explained: The Accessible Guide to Building an Investment Portfolio, is published by Kogan Page.

As senior writer, he writes the shares and politics & economics pages, as well as weekly Blowing It and Great Frauds in History columns He also writes a fortnightly reviews page and trading tips, as well as regular cover stories and multi-page investment focus features.

Follow Matthew on Twitter: @DrMatthewPartri