By Simon Miller

Spanish debt rose above 6% today for the first time since the European Central Bank's (ECB) Mario Draghi announced banking union plans for the eurozone.

Spain is digging in its heals over further austerity cuts with finance minister Luis de Guindos ruling out further fiscal cuts that are needed to qualify for a eurozone rescue.

With a bailout depending on Spain formally requesting aid, the country playing hardball has left the region in limbo.

As a result, Spain's 10-year debt rose to 6.007 before falling back to 5.972 as of 16:47BST.

At the weekend, de Guindos said the country's €100bn (£81bn) austerity measures were “sufficient” to meet a deficit ceiling of 6.3% of GDP this year.

Spain will attempt to borrow more than €3.5bn in bond auctions for the first time since early March on Thursday when it will auction between €3.5bn and €4.5bn of 12 month and 18 month T-bills on Tuesday and the same amount in bonds later in the week.

The March auctions came when the market was flooded with cheap ECB credit through its long-term refinancing operations and the Spanish government is bargaining on investor bets on an imminent ECB bond-buying programme.

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