This content is not available in your region

Grim numbers force Spain towards a bailout

Grim numbers force Spain towards a bailout
Text size Aa Aa

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.

Euronews is no longer accessible on Internet Explorer. This browser is not updated by Microsoft and does not support the last technical evolutions. We encourage you to use another browser, such as Edge, Safari, Google Chrome or Mozilla Firefox.