Spain paid an interest rate of nearly 7 per cent to raise almost $5 billion US in an auction of 10-year bonds Thursday, the highest rate since 1997 and a level seen as unsustainable over the long term.

The finance minister insisted, however, that a bailout was out of the question and said Spain's overall debt load — about 70 percent of gross domestic product — is manageable.

"The sustainability of our debt is beyond any doubt," Elena Salgado told Cadena Ser radio.

She said the 2011 budget had allotted 27 billion euros for debt interest payments and "even with all this tension we are going to spend three billion less."

Salgado also said at least 12 of the 17 countries that use the euro are seeing their borrowing costs rise, so Spain is not a special case.

"We are seeing systematic attacks on our sovereign debt," the minister said. "Today it is Spain, yesterday it was Italy, the day before that it could have been Belgium, and tomorrow it could be any other country, even the ones considered central to the euro, such as Austria or France."

Thursday's rate of 6.97 per cent compared with 5.43 per cent in the last such auction Oct. 20.

'Today it is Spain … and tomorrow it could be any other country'  —Spanish finance minister Elena Salgado

Demand was relatively weak. The amount of debt sold came in under the maximum target set by the Treasury.

After the auction, yields on Spanish 10-year bonds shot up. In early afternoon they stood at 6.79 per cent on the secondary market. That was 4.93 percentage points above the yield of the equivalent benchmark German bund.

Spain's chapter of the European debt crisis has engulfed the campaign for Sunday's general elections.

Opposition conservatives are expected to score a landslide win over the ruling Socialists, saddled with an economy that has 21.5 per cent unemployment, posted zero growth in the third quarter and is not expected to improve much next year.

Spain is struggling to recover significant economic growth after enduring nearly two years of recession prompted in part by the collapse of a real estate bubble. It is the periodic focus of fears it will be the next eurozone country to require a bailout, after Greece, Ireland and Portugal.