European officials travel to Washington this week seeking a bigger global war chest to combat the debt crisis as Spain’s government battles to quell renewed market turmoil over its finances. Three weeks after European leaders unveiled emergency euro-area funding exceeding the symbolic $1 trillion mark, concerns about Spain’s position have ratcheted the nation’s borrowing costs to the highest levels this year. Crisis-fighting resources will dominate talks at the International Monetary Fund’s spring meeting in Washington from April 20-22. While the US insists that Europe can overcome the crisis using its own financial firepower, euro-area officials say they’ve done enough to trigger additional global assistance. The urgency was underscored last week as Spanish and Italian yields jumped, challenging assumptions among the region’s leaders that the worst of the fallout was behind them. “After three months that were calmer than expected, the euro crisis is back,” said Holger Schmieding, chief economist at Berenberg Bank in London. “The speed of the recent surge in yields has elements of a renewed market panic.” Spain’s 10-year bond yield climbed as much as 18 basis points today to 6.16 per cent, the highest level since Dec.1, before retreating to 6.06 per cent at 2:45 p.m. in Madrid. That extended a rise of 19 basis points last week. Similar-maturity Italian yields rose 4 basis points to yield 5.56 per cent. The 17-nation currency fell 0.2 per cent to $1.3048 at 2:49 p.m. in Frankfurt, after sliding below $1.30 for the first time since January. The surge in borrowing costs prompted one of Spain’s deputy economy ministers, Jaime Garcia-Legaz, to call on the European Central Bank to resume its direct intervention in the markets. “They should step up purchases of bonds,” Garcia-Legaz said in an April 13 interview, wading into a debate that has split the ECB. While Executive Board member Benoit Coeure signaled April 11 the ECB may buy up Spanish bonds, his Dutch colleague Klaas Knot said two days later that the ECB is “very far” from reactivating the measure. Spanish Prime Minister Mariano Rajoy, who is pushing through an austerity agenda targeting spending on health and education, won backing from his party’s regional leaders over the weekend. People’s Party chiefs from regions including Madrid, Valencia and Galicia agreed to streamline bureaucracy and write deficit targets into budget laws. “We need to manage a reality that is very tough,” Maria Dolores Cospedal, the deputy party head and president of Castilla La Mancha, told reporters after a party meeting. Rajoy’s government has struggled to convince investors after last month saying it would not meet budget deficit targets set by the European Commission and the previous government. European governments are banking on a bigger safety net to soothe markets as the crisis continues to simmer, with Spanish borrowing nearing the level that prompted Greece, Ireland and Portugal to seek bailouts. Sentiment will be gauged again on April 19, when Spain auctions two-and 10-year debt. The Europeans’ appeal for funds may find more success after IMF Managing Director Christine Lagarde last week scaled back her request for $600 billion in new contributions. Lagarde said April 12 that she is hoping to make “real progress” at this week’s meetings. She has also said the IMF needs more cash to quell economic risks separate from Europe’s woes, such as higher oil prices and slowing US growth.