The Spanish risk premium falls to 2008 lows amid improved economic forecasts

The Spanish risk premium, the extra cost that the markets demand from the country for issuing debt with respect to what Germany pays (whose ten-year bond continues to be the reference in terms of stability and security in Europe) This Wednesday it fell below 43 basis pointsstanding at its lowest level since 2008, right at the beginning of the last international financial crisis.

In the opening of the secondary debt market, The Spanish ten-year bond has stood at 3.260%compared to the 3.278% at which it closed the previous session. Meanwhile, the German Bund was trading at 2.831%. With this new decline, the Spanish premium is well below the French premium (70 basis points), the Italian premium (65.6 basis points) or the Greek premium (60.3), although above the Portuguese premium (29.8).

The risk premium is an indicator of the solvency of a State and the confidence that investors have in the solidity of its economy, expressing the cost of financing itself through the issuance of public debt in comparison with a reference country (in the EU, Germany). In the worst moments of the financial and debt crisis, this variable It reached close to 600 basis points. It was in July 2012, after the rescue of the Spanish banks and when there were fears of bankruptcy in the peripheral economies.

This same week, the Secretary of the Treasury, Paula Conthe, pointed out that the organization is confident that the risk premium will continue to fall in the coming months and pointed out that the improvement in the rating of Spanish sovereign debt by the main agencies will allow more than half of the debt to be in the hands of foreign investors in the short term, from the current 48%.

The agency dependent on the Ministry of Economy, Commerce and Business maintains emissions planned for 2026 at 55 billion, the same figure as this year, despite the fact that gross volume will increase by 4.2%. Thus, the improvement of Spain’s rating will allow for a greater presence of Nordic and Asian investors, but also from the Middle East. In the last four years as a whole they have acquired 208 billion in debt, thus compensating for the gradual withdrawal of the European Central Bank (ECB), which has reduced its presence by 65 billion throughout this period, which coincides with the rise in interest rates.