MADRID, June 19: Spain saw its borrowing costs soar on Tuesday as it tapped markets for the first time since Greek elections, feeding fears it could be the next victim of the eurozone crisis.

Deepening concerns over Spains's fast-rising debt and its banks, which have been thrown a eurozone lifeline of up to 100 billion euros ($125 billion), have driven Spain to the centre of the storm.

Even as Greece's pro-bailout parties negotiated the terms of a coalition government, averting the immediate risk of a disorderly exit from the eurozone, Spain's troubles mounted.

Spain's Treasury succeeded in raising 3.04 billion euros ($3.8 billion), beating its target 2.0-3.0-billion-euro target in an auction of 12- and 18-month notes.

But it had to pay exorbitant rates to lure investors — 5.074 per cent for 12-month debt and 5.107 per cent for 18-month debt.

“We are entering a situation of near panic,” said Fernando Ballabriga, head of economics at ESADE business school.

“Financing could be cut off drastically from one day to the next. It is very difficult to predict,” he said.

“Now it is focused on Spain. In no time it could be Italy.” Spain is paying rates that are unsustainable and put it on track for a full-blown bailout, said report by Kathleen Brooks, research director in London at online brokerage Forex.com.

The eurozone's fourth largest economy could avoid a state rescue only if its debts were underwritten by stronger eurozone partners and the European Central Bank stepped in to buy up its debt, she said.—AFP