Solid demand for Spanish bonds as optimism returns - by Victor Mallet

Spain has held a successful auction of five-year government bonds amid a surge of optimism in the markets that the eurozone is beginning to tackle its sovereign debt crisis following bail-outs for Greece and Ireland.

While most economists still believe that Portugal will need to seek assistance from the European Union and the International Monetary Fund, they are divided about the prospects for the much larger Spanish economy, regarded by pessimists as next in line for a rescue if Portugal succumbs.

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