Debt crisis: Spain and Italy borrowing cost fall on They said that this was of "capital" importance. One of the major problems for Greece was that official lenders wanted to have priority over existing creditors and that immediately hit Greek sovereign debt. Earlier this week the Spanish government, which had just requested EU help for its banking sector, admitted it could not continue to finance itself at high prevailing rates. The difference between the rate which Italy must pay to borrow for 10 years and the German rate fell to 4.26 percentage points from 4.658 points on Thursday. This so-called spread is the risk premium which Italy must pay above the German rate, the benchmark in the eurozone. When a government borrows money for a period of 10 years for example, it has to offer the market rate at issue. It does so by paying a fixed interest rate for the length of the loan. Thereafter the bonds are traded on the secondary market. If the perceived risk of owning the bonds rises, the price of the bonds falls and the fixed interest as a percentage of the new price automatically rises, and vice versa.