Spain’s economy continues to contract.
The country’s central bank has calculated GDP shrank by 0.4 percent between July and September from the previous three months.
Year on year the decline was 1.7 percent.
New figures also show one in five Spaniards is now living below the poverty line with families’ average income down almost two percent from last year.
That comes as Moody’s downgraded five Spanish regions.
The rating agency did that because those regions have limited cash reserves to repay the money they’ve borrowed.
They included the northern region of Catalonia, which accounts for a fifth of Spain’s economic output.
The downgrade will make it all but impossible for the regional governments to borrow on the international markets.
That means the central government will have to help them with billions that Madrid does not have.
The result is more pressure on Prime Minister Mariano Rajoy to bite the bullet and seek an EU bailout, which in turn would enable the European Central Bank to support the country’s bonds – thereby reducing Spain’s crippling borrowing costs.
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