Spain's Prime Minister Warns Country Is in Danger of Being Shut Out of Markets A protester shouts slogan during a demonstration against austerity cuts in Barcelona, Spain, Tuesday, May 15, 2012. Spain got caught up in the uncertainty surrounding the European single currency and the electoral stalemate in Greece Monday as it saw its borrowing costs rise and stock prices fall at alarming rates. AP Photo/Manu Fernandez MADRID - Spain's prime minister warned Wednesday that the country faced the danger of being locked out of international markets as investors continued to fret about the future of the euro and Greece's place in the 17-country eurozone. "Right now there is a serious risk that (investors) will not lend us money or they will do so at an astronomical rate," Mariano Rajoy told Spanish lawmakers. Investors are getting increasingly concerned about the survival of the single currency and whether the Spanish government can push through its deficit-reduction plan at a time of recession and mass unemployment. Interest rates, or yields on 10-year Spanish bonds traded on the secondary market hit 6.32 percent in afternoon trading - taking them closer to the unmanageable levels that prompted bailouts for Greece, Portugal and Ireland. At one stage Wednesday, the difference between the interest rates demanded by investors for Spanish and German 10-year bonds shot past the 500 basis point level to hit its highest point since the euro was introduced in 1999. "The spread has risen a great deal, which means it's very difficult to finance oneself and to do so at a reasonable price," Rajoy told Parliament. Speaking to journalists, Rajoy also said the austerity measures Spain was taking were the correct ones but felt the European Union could do more. The euro needs to be strengthened. I don't want Greece to leave the euro," he said. I think that would be a big mistake, very bad news, and I believe public debt sustainability must be guaranteed and all of us must fulfill our commitments, Rajoy's reforms covering the labor and financial sector have so far failed to calm investor nerves or improve Spain's stricken economy, which is languishing under the weight of a 24.4 percent unemployment rate. The economy is predicted to contract by 1.7 percent this year. Two of the country's main problems are overspending by regional governments and banks burdened with billions of euros in bad loans following a real estate crash that started in 2008. A major concern is that bank failures might swamp public finances and that the government will be unable to carry through its austerity measures and reforms. Emilio Ontiveros, head of Madrid-based consultancy AFI, said the 500-point spread was a key psychological barrier, reflecting uncertainty not just about Spanish public finances but about the Spanish economy in general, he said. "Now, more than ever, it is necessary for the European Central Bank - the only entity with enough firepower to stabilize debt markets - to intervene consistently by buying bonds, not just Spanish ones but probably also Italian ones, and from then on give clear signals that maintaining the eurozone is a priority because otherwise Europe could fall apart," Ontiveros told Cadena SER radio. Spain has its next bond auction Thursday when it sells bill maturing in 2015 and 2016.