Markets endorse Spain's austerity policy

The substantially lower interest rates charged on Spanish and Italian government bonds on Thursday are a comforting signal for Europe, the daily La Vanguardia writes: "Yesterday Spain passed its first test on the markets when it emerged stronger from the first auction of its government bonds this year. In this way the investors gave their seal of approval to the austerity measures for 2012 passed by parliament the day before. The government's undertaking to reduce the budget deficit to 4.4 percent this year was generally acknowledged by the fact that bonds totalling 10 billion euros with maturities of three, four and five years had considerably lower interest rates than with the previous issue. ... The good performance of Spanish bonds was bolstered by the successful auction of Italian one-year government bonds. The lower interest rates on the bonds of the two countries also send a reassuring signal to the rest of Europe."

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