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Debt markets cut off Spanish institutions

The international debt markets have now cut off most Spanish companies and institutions, senior officials confirmed yesterday.

Carlos Ocana, treasury secretary, and Francisco Gonzalez, chairman of BBVA, Spain’s second largest lender, yesterday expressed concern over a credit crunch for Spanish institutions seeking international financing.

According to EuroIntelligence, Spanish banks alone now account for 16.5 per cent of direct borrowing from the European Central Bank.

Spain has already had to bail out smaller lenders as a second credit crunch hits peripheral eurozone countries such as Spain, Portugal and most notably Greece.

The ECB has already had to print hundreds of billions of euros and extend its lending drastically amid uncertainty as to whether peripheral states will retain the single currency.

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