Spain’s recession deepens in quarter 2 of 2012: Bank of Spain

Spain’s central bank has announced that the European country’s recession deepened in the second quarter of 2012 after its gross domestic product (GDP) “contracted at a faster pace.”

The central Spanish bank, Bank of Spain, said on Wednesday that figures showed the country’s economy contracted at a faster rate in April to June than in the first quarter of 2012.

Spain’s economy shrank by 0.3 percent in the first quarter of this year, as the country fell back into recession for the first time in three years.

Earlier on Wednesday, Spanish Prime Minister Mariano Rajoy warned that his country cannot finance itself for a long time at the current high rate of borrowing.

He made the remarks as the yield on the Spanish government 10-year bonds traded at more than 6.8 percent, a painfully expensive rate.

On Monday, Spain formally demanded a rescue bailout of up to 100 billion euros (USD 125 billion) in aid from its 16 eurozone partners to save its ailing banking system.

Economy Minister Luis de Guindos said that the Spanish government will sign a deal with its euro-area peers for the rescue loan by July 9.

The Spanish government made the appeal after two international audits said that Spain’s banks could need up to 62 billion euros (USD 77.7 billion) to survive a severe financial slump.

Various eurozone member states, including Greece, Spain and Italy, have been struggling with deep economic woes since the bloc’s financial crisis began roughly five years ago.