Spain's waiting game is a risky one

So far at least, the Spanish Government’s decision to delay seeking a bail-out does not seem to have backfired. After all, Spanish government bond yields remain low by recent standards. But the Government would be unwise to wait too much longer. After all, if markets were to conclude that the ECB’s OMT programme might not ever be used, Spanish yields could quickly shoot back up to their summer highs. In such a scenario, Spain would suddenly find itself in a much weaker bargaining position to negotiate favourable conditions on a bail-out.