A pair of independent auditors advised Spanish authorities on Thursday that it will need as much as 62 billion euros (about $79 billion) in capital just to save its struggling banks. Spain brought in the independent auditors to determine how much to ask the EU for in bailout funds as it continues to try and fight its way out of a sovereign debt crisis. The estimates came in just hours after a debt auction in which Spain's medium-term borrowing costs rose to their highest levels since the euro was introduced in 1999.
Later on Thursday, European finance ministers were scheduled to meet to discuss how best to deliver up to 100 billion euros in bailout funds to the struggling Spanish banking sector, which is on the verge of collapse after incurring billions of dollars in losses on bad loans as the nation's housing bubble burst. Of course, many economists around the globe have been warning that even with the banking sector stabilized, Spain will likely still need a bailout of its own, the cost of which some have estimated will be as high as half a trillion euros ($630 billion).
The Euro are sovereign debt crisis has now been one of the major deterrents to global economic growth for 2 and a half years. Substantial bailouts to Ireland, Greece and Portugal have failed to diminish the underlying risk of collapse for European nations, which collectively represent the world's third largest economy. During Wednesday's auction, Spain sold 2.2 billion euros worth of mid-term bonds, with the yield rising to a 15-year high of 6.07 percent. While demand was higher than at an auction held last month, showing that Spain can still raise money if needed, most economists agree that the yield has grown too high to be sustained for any lengthy period of time.