Eurozone crisis 'could come back with a vengeance'

The Eurozone debt crisis is again causing volatility on global stock markets today with mounting concerns over Spain.

The Spanish and German Finance Ministers are meeting in Berlin to discuss Madrid's long-term borrowing costs rise to over 7.5%.

Credit ratings agency Moody's is warning that Germany's AAA status could be in jeopardy as a result of the problems in Spain and Greece.

Economics reporter Ed Conway says Spain's denial that it will require a full bailout is not convincing market investors.

"Really a lot of investors out there very worried about Spain," he said.

"(They are) worried (that) despite the fact that we've had news of a potential bailout for the country's banks, despite the fact that there are assurances from the government that they will sort things out, they really don't want to buy their debt.

Mr Conway said it is a reminder that the Eurozone crisis has not gone away.

He said: "In fact, like last summer it could come back with a vengeance."

Rabobank Market Strategist Richard McGuire has said it now appears inevitable that Spain will need a full rescue package.

"Spain has to stump up more than 7.5%, so with interest rates at these levels this is clearly unsustainable over the long-term," Mr McGuire said.

"Spain - if interest rates stay at these levels - now finds itself in a position where it would simply have to issue debt in order to keep up with past debt repayments.

"So its overall stock of debt would snow-ball, which is clearly untenable."