Spain's Treasury cut net debt issuance plans for 2011 from 2010, responding to rising financing costs as markets demand higher premiums to hold debt from the euro zone's peripheral economies.

The Treasury will issue net medium- and long-term debt of 47.2 billion euros ($62.04 billion) in 2011, down from 62.1 billion in 2010, the Economy Ministry said on Wednesday.

Net short-term debt planned for 2011 was zero, because it expected issues to balance maturities, the ministry added.

Austerity measures, put in place by the government in the middle of the year to consolidate public finances, have meant financing necessities are less than in 2010, the ministry said.

Spain's Socialist government has passed spending cuts worth over 50 billion euros and a slew of structural reforms this year to rein in the public deficit and persuade investors it will not follow Greece and Ireland in to applying for financial aid.

Economists are concerned Spain's banking sector -- battered by a collapsed housing industry, unemployment that is more than double the European average and a stagnant economy -- will make future financing unsustainable.

The spread between Spain's 10-year bono and the German Bund stood at around 247 basis points on Wednesday, off a euro life-time high of over 310 bps reached at the beginning of December but much higher than the 67 registered in April.

(Reporting by Martin Roberts; Writing by Paul Day; Editing by John Stonestreet)