Pressure on Spain's debt markets briefly sent the yield on the country's benchmark 10-year bond above 7 percent Thursday and caused the Iberian nation's risk premium to close at a euro-era record of 579 basis points.

Analysts said the day's disappointing debt auction - in which investors demanded interest rates above 6 percent for Spain's five- and seven-year notes, even higher than the rates in the Treasury's most recent auction of 10-year bonds - drove down bond prices on the secondary market.

In the wake of the auction, which generated less demand than previous debt sales, Spain's risk premium - the extra return investors demand on the country's 10-year bond relative to equivalent safe-haven German debt - climbed as high as 583 basis points before falling slightly at the close.

The yield on Spain's 10-year bond closed Thursday at around 6.9 percent, a level that many economists say is unsustainable over the long haul.

The Spanish economy has been battered by the global recession and the collapse of a massive real-estate bubble, which has left many banks saddled with toxic property assets.

Overall unemployment stands at more than 24 percent, while Spain's young people are facing a jobless rate of 50 percent.

In recession for the second time in three years, the country has suffered a sharp drop in tax revenues stemming from numerous businesses failures and the high joblessness.

In a bid to improve the country's financial picture, Spain's government has pushed through an austerity package - approved Thursday by Parliament - aimed at achieving 65 billion euros ($80 billion) in savings to meet a European Union-mandated budget deficit target.

The austerity package, the fourth since conservative Prime Minister Mariano Rajoy took office late last year, includes an increase in the sales tax and cuts to the wages of public-sector workers and retirement benefits.

Spain's ailing banks are due to receive a 100-billion-euro ($123-billion) European Union bailout over 18 months, but the rescue has not allayed concerns about the country's ability to solve its economic woes. EFE