A jump in the bond yields of Spain weighed on a recovery in European stocks and pushed Asian indexes lower as investors feared Madrid may eventually need a bailout that the eurozone can scarcely afford.
Spain's 10-year bond yield, the rate the country would pay if it were to tap markets for money, jumped to 6.10 percent on Monday from about 5.90 percent on Friday. Yields rose in other financially shaky countries like Italy, but Spain was the focus as investors consider it the next weakest link in the 17-nation eurozone.
The country is caught between the needs to lower debt by cutting spending and to boost growth by investing more. Above all, if Spain were to need a bailout, Italy would be severely destabilized as well. The eurozone bailout funds, totaling (EURO)800 billion, would be too small to rescue both.