Spain's Prime Minister Jose Luis Zapatero has been forced to postpone his holiday as investors continue to flee his country's debt.
Mr Zapatero had been due to leave for south-west Spain.
But on Tuesday, the yield on Spanish bonds reached 4.04 percentage points more than German debt - a record since the euro was introduced in 1999.
The so-called premium to hold Italy's debt also hit a record.
"The prime minister has postponed the start of his holidays," Mr Zapatero's spokesperson said. "He is keeping an eye on the international economic situation."
The latest spike in yields comes at a bad time for the Spanish government, which plans to raise as much as 3.5bn euros ($5bn, £3.1bn) in a bond auction on Thursday.
Higher costs
Despite another bailout for Greece last month, the eurozone is struggling to contain fears that more countries will not be able to repay their enormous debts.
The Irish Republic and Portugal have both been bailed out, and Greece has been rescued twice.
And as the bond yields rise, Italy and Spain have seen their borrowing costs rise sharply in recent weeks.
Italy has the largest sovereign debt of any European country.
As a percentage of output, Italy's debt is second only to Greece in the eurozone - whose huge debts have led to two bailouts.
As their bond yields rise, it becomes more expensive to sell more debt - which leads to a vicious circle as the old debt comes due for repayment.
On Tuesday, Germany - the biggest economy in Europe - saw its bond yield drop below the inflation rate for first time since reunification.
This suggests that investors are now so scared, they are willing to sacrifice a return on their investment to hold the least risky bonds in Europe.
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