Spain is officially in a state of recession according to today’s released GDP figures; the figures for the last quarter came in at -0.3 prompting fears that the country will need another bailout in the region of €120 billion.
The news came as no surprise to observers of the Eurozone as the pain for Spain has steadily been getting worse for the past few months.
Foreign Minister Jose Manuel Garcia-Margallo said: “The figures are terrible for everyone and terrible for the government… Spain is in a crisis of huge proportions.”
To add to Spain’s woes the credit ratings agency Standards and Poor lowered the credit ratings for sixteen of the battered nation’s banks. Two of them have been reduced to junk status with the big players, Banca Civica and Santander receiving status reductions. In Santander’s case its rating was cut by two points from A+ to A-.
This makes the banks rating higher than that of the country’s which was reduced to BBB+ last week.
The country’s unemployment rate rose to 24.5% last week with over 50% of young people unable to find work. Last week Madrid published a report saying that it expected the country’s economic growth and GDP would shrink by 1.7% by the end of the year.
With the country facing further economic problems, further public unrest and more pressure from the IMF and ECB it is difficult to see how Spanish Prime Minister Mariano Rajoy can sustain the countries situation or find a way out of the mess.
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