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Business

Spain bemoans record flight of investors

Investors have pulled record sums out of Spain in the first six months of 2012. The country's central bank speaks of an alarming development that's attributed to a weak economy lurching towards a sovereign bailout.

Investors from around the globe withdrew a record 219.8 billion euros ($276 billion) from Spain in the first half of 2012, the country's central bank reported on Friday.

The Bank of Spain said it was the largest pullout of resources since such statistics were first compiled in 1990. The figures for the first six months of the current year marked a dramatic reversal from the period in 2011 when a net inflow of 22.5 percent was logged.

In June of this year alone, outflows totaled 56.6 billion euros, down from a gain of 7.9 billion euros in the same month last year.

Repayment pressures

For the whole of 2011, 68.3 billion euros in resources left Spain as investors searched for safer overseas opportunities.

A pledge by European Union lenders to grant Spain's ailing banks up to 100 billion euros in bailout funds has failed to stem the flight of capital. Many banks in the country are still feeling the aftermath of a property bubble that burst back in 2008 and left them with toxic assets.

Bad loans hit a record high in Spain in June, reaching 9.42 percent of total credits. Spain faces repayments of about 30 billion euros in October and is increasingly expected to become a candidate for a broader sovereign bailout.

hg/sej (Reuters, AFP, dpa)