Spanish 10-year borrowing rates surged again above the danger level of seven per cent yesterday, ahead of a meeting of eurozone finance ministers being held against a backdrop of renewed market pressures.

The yield on 10-year bonds rose to 7.026 per cent from 6.912 per cent late on Friday.

A rate above seven per cent is considered to put a eurozone country at risk of needing a debt rescue.

Analysts said they did not expect the Eurogroup meeting of eurozone finance ministers in Brussels later yesterday to make significant progress on issues arising out of an EU summit 10 days ago.

That summit was presented by EU leaders as a breakthrough in structuring help for Spanish banks, by separating it from national debt, and for establishing a banking union. The “spread” or difference between the rate Spain must pay to borrow for 10 years and the German rate – the benchmark for the eurozone – widened to 5.66 percentage points.

The Italian 10-year rate also rose to 6.113 per cent from 6.016 per cent.

The yield on 10-year German debt fell to 1.312 per cent from 1.326 per cent.

“Investors doubt the capacity of Spain and Italy to clean up their public finances, given the worsening of the economic situation,” BNP Paribas bond strategist Patrick Jacq said.

The ministers were expected to delay most of the decisions on Greece, which wants longer to meet rescue terms, on Cyprus, which wants help for its banks, and on Spanish banks, to a meeting on July 20.