Spain auctioned bonds with several maturities on Wednesday in the first test after the budget announcement yesterday, where the borrowing cost on these bonds surged while demand fell on fears Spain will follow Greece and fall behind as the nation already slipped into recession.

The Spanish Treasury sold as much as 2.589 billion euros of bonds today, where the nation auctioned 1.127 billion of three-year notes on an average yield of 2.89%, up from 2.44% recorded earlier in March. Demand of these bonds fell sharply to 2.41 times from almost 5 times recorded an auction earlier.

The nation also sold 973 million euros of 4-year bonds, producing 4.32% yields, compared with 3.38% previously recorded in March. Bid-to-cover ratio fell slightly to 2.46 times from 2.59 times.

Finally, the treasury sold489 million euros of 8-year bonds on an average yield of 5.34%, up from 5.16% seen in February. Demand rose 2.96 times from 1.99.