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. Spain suffers a relapse into recession, GDP fell 0.3%

. Spanish GDP since 2008

. Spanish Readers tell their stories . Live in Spain? Give us your views

Schäuble: Spain remains on the road . European shares fall

18:15:

time to stop the blog for the day. A summary of the Hours:

Spain was plunged into a double dip in the latest blow to the economy of the eurozone.

Spanish GDP contracted by 0.3% during the first three months of 2012, the second consecutive decline, as austerity measures of the country and most successful of the economic downturn. Currently there are eight countries of the recession in the euro area, and three members of the Euroepan Union.

Analysts predicted that the economic situation of Spain will continue to weaken in 2012. Louise Cooper BGC

warned it could face a huge bill to bail out their banks, while Guillaume Menuet Citi sees further austerity measures.

Spanish Economy Minister Luis de Guindos confirmed reports that the Madrid government plans to create a new vehicle to borrow toxic financial sector .

Just do not call a bad bank ....

economic downturn .

of Greece continued.

Retail sales fell

13% in February, measured by volume.

aa files markets closed lower.

In London, the FTSE 100 ended 39 points lower in 5737, according to new data from the industrial belt of Chicago was lower than expected.

We'll be back tomorrow. Thank you very much night and good luck!

17:55:

Just time for a sarcastic tweet Bill Gross, Pimco bond chief of staff, trade, is not impressed that the fall of Spain's GDP was slightly less bad than expected:

Gross: Number of hits for Spain! - 0.3% of GDP as against - 0.4% forecast. The wonders of austerity! (NO).

- PIMCO (@ PIMCO) April 30, 2012

5:25 p.m.: Here are some comments from readers in Spain .....

Cannon said he certainly feels like a recession in the region:

I live in an apartment building in rural areas of Catalonia, and a rough guess I would say that about a third of households do not have someone here full time, a permanent job. Two of my neighbors have had their homes repossessed in the last week. I can help a volunteer driver delivering food parcels to families who can not afford to buy food, and were really surprised to find the dependence of these documents.


Update on a large number of people working in the dark is valid to some extent. In fact, I am currently "using" a local builder and a plumber to work on my house. I am happy to pay in black, is not it, but I can only provide enough work for a week or two, do not know if it will have some work after that, and he simply can not afford the ? 250 minimum social security for the month you would have to foot the bill for my law.

Suaimhneas

also said that the recession has hurt many Spanish people:

In Madrid, where I live, the effects of the "crisis" as they call it here, very visible. The economics of the situation in Spain are widely reported, but the social effects are, curiously, they receive less attention. The number of people evicted from their homes increases as banks seize property purchased during the boom. There are many homeless in the city and there is a clear lack of appropriate services to solve the problem. During the winter, three homeless men died in the street of the exhibition here in 10 days. The "soup kitchen", which distributes free food to people is more heavily subscribed and the number of people begging on the street is enormous. Walking through some streets of the city, with ruined buildings and many businesses closed and hands outstretched and can be forgiven for thinking they were somewhere in the Third World. Things can not be that bad in Madrid and Barcelona, ??but in some of the poorest regions such as Galicia, the situation is quite dark.

acorn7817

cited several reasons for the Spaniards to remain optimistic:

Spain can still grow your own food, play better football in the world, their own rich and varied cultural life, basking in glorious weather, beautiful women I admire are clean (and England, credit where credit is due: D) and live your own life, almost as happy as before entering the euro should push come to the truth, we 're just going to have to reduce the worthless things in life like the iPod and the return to basic principles are always happy before, not family, friends and work to live, live to work.

'm sure she'll survive somehow!

A big thank you to everyone who took the time to comment on this issue. We met some of the comments before 2:32 p.m., 1:25 p.m. and, and 9:02. There are many more in the comments too.

5:03 p.m.:

Re-Defining the expert in economics, has published an interesting article today on European banks to TODAY ' Today, the alert in the center of a "perfect storm" that could radically change the industry.

The full article is here. In it, redefine the director

Sony Kapoor

argues that European banks have not yet experienced its toughest challenges, nearly four years after the fall of Lehman Brothers. aa

Kapoor wrote:

The combination of banking models largely unreformed, major changes in regulating the level and uncertainty about its final form, and the worsening Eurocrisis means that banks in the region euro face enormous challenges, potentially insurmountable.

These challenges include the reduction of the euro area economy (which will result in more losses for European banks), and interdependence between the weak banks and weak countries (such as Spanish and Italian banks have satisfied its sovereign debt).

Well even if something disturbing ....

4:51 p.m.:.

The news of the recession in Spain, as well as disappointing manufacturing data from the U.S., have conspired to leave European stock markets on the net

A summary

closing FTSE 100: - 0.68% (39 points behind 5737)

Spanish IBEX: - 1.3%

Italian FTSE MIB -

French CAC -. 1.5%

German DAX -. 0.5%

4:28 p.m.:

a heads-up for tomorrow - we expect a lot of events in Greece on Tuesday to commemorate May Day, a traditional time the protest.

hundreds of thousands of workers in public and private sectors are expected to down tools. May disrupt the activities of local and national governments and force many businesses to close. Transport links could also be affected, especially as a union representative Greek sailors are also plans a strike.

GSEE, the largest private sector union, urged the workers to participate in events of May Day. In a statement, said:

strike May Day this year and protests have acquired the characteristics of a particular battle amid the crack continues, unjust, antisocial and neoliberal ... Workers and unions are preparing for battle.

3:51 p.m.:

recent economic data in the United States has raised fears that the world's largest economy is not recovering as quickly as thinking

Chicago PMI, a measure of manufacturing output in the Chicago area, has fallen to its lowest level in 29 months.

He slipped to 56.2 in April, down from 62.2 in March (but still above the 50 point mark is shown that the sector expanded or reduced).

Much of the U.S. auto industry is based in the Chicago area, so that the investigation is considered a decent guide for the area. Marketwatch has a good explanation:

The data will help to reinforce the idea that the unusually warm winter helped make the request in the early parts of the year.

panelists lamented the investigation of a number of factors, the advantages and disadvantages of offshoring manufacturing cost of oil.

"Despite all the rhetoric to the contrary, it seems that the air is out of the planet," said a purchasing manager.

Josh Raymond

City Index
agreed, adding that:

today's data may indicate that the U.S. economic recovery is losing some steam ...

15:25: An interesting development - Minister of Economy of Spain Luis de Guindos confirmed that the Spanish Government intends to create a "bad bank" to hold troubled assets the most persistent in its financial sector.

of Guindos

told an audience in Santiago de Compostela (also see last post) that the distribution of toxic assets to another organization that would "good for the banks."

added that there is no intention to seek "foreign aid" for the troubled banking sector in Spain - suggesting that the "bad bank" plan is the favorite in Madrid help its banks again his feet without help from abroad.

How

a bad bank? In principle, a commercial bank in difficulty to borrow, transfer to the creation of the agency at a fraction of its real value, and record the loss on its balance sheet. This allows the commercial bank to clean up its balance sheet at a time that should have a haircut even more to convince another commercial bank for the purchase of assets.

The Financial Times today, the Spanish government does not like "bad bank" of the term. He writes:

government officials insist that government-sponsored scheme should not be called a bad bank, because it is not a bank and participating lenders will be able to park assets that have been assigned if adequate provision for doubtful accounts, regardless of value.

This raises the question of how it will help banks trying to make other provisions for loan and strengthen its capital. An official said the banks to ease the burden of trying to sell houses and let them concentrate on their business heart of the lending to the private sector. Bank officials in favor of the idea say it is better than a bailout of the banking system financed by the State or the European Union.

2:59 p.m.: German Finance Minister

Wolfgang Schäuble offered to the Government Spanish some support (if required) today.

Speaking at a meeting in Santiago de Compostela in Galicia, Schäuble said that Spain was in the right way (hat tip

Reuters

, which is slamming comments now).

Schäuble added that the next meeting of the European Council will examine ways to boost investment in Europe, but warned that talk of growth does not mean that Europe was changing its emphasis on austerity.

Spanish economy minister

Guindos Luis

also attended the event in Santiago de Compostela.

It remains the message, indicating that austerity is not incompatible with growth

fans of expansionary fiscal contractions that are deposited in the comments Guindos, but others argue that Europe fall into recession tells a different story.

more as it comes into play ...

14:32: stories of life in Spain continue to come through here are two more (to my colleague

Hannah Waldram aa

Staralfur

gives this perspective, the capital of Catalonia:

2 things

I lived in Barcelona for years around the corner of the Holy Family - I know about life in Spain. If "party" in pride, etc. that will be uprooted - that simple. The same goes for the festival of Grace, you can get a liter of diluted urine for 10 ?, or follow the crowd of people and buy a six pack of 6 ? Star and enjoy your evening. festival in Spain (ie real life) .... a pitcher of beer, even sitting in a place rarely exceed ? 4. Bar 3 minutes walk from his house here in Madrid (Barrio de Guindalera, not a central or flash or fabulous as they say Chueca or C / Serrano), full of local people, by the gypsies of Andalusia - and beer deal, you can get is ? 2.50. Just over the road in a brewery (again completely "local") 4 ? for a pitcher.

know we can not let the facts from someone who lives in Spain in the way of a good argument ... as you were!

robert232

provides a voice of experience:

I lived here for 37 years and through several recessions. Social life that you describe has always been. Believe me that the recession is biting, but the bars are always full.

Lots of other stories in the comments below -. And previous raids here and here

2:02 p.m.:

through the Iberian Peninsula, the Portuguese government insisted today that it will achieve its deficit reduction without causing further pain on its citizens (in addition to what is already aligned).

Speaking in Lisbon, the Minister of Finance Vitor Gaspar

said that the Portuguese Government intends to reduce its deficit to 1% of GDP in 2013 and only 0.5% of GDP in 2016.

added that this plan does not provide any additional austerity measures this year or years later, above those already included in the ? 78bn rescue of Portugal.

Speculation has been circulating for weeks that Portugal may need a program to assist the other hand, despite repeated denials of Lisbon. Gaspar denied this conversation today, saying the country must be ready to return on the bond markets in September 2013 [under the current regime, it is the date on which Portugal should borrow on international markets new]. aa

Regarding bond markets today, the trades of Portuguese sovereign debt at a price well below their nominal value, giving her 10-year bond yield (in fact, the rate of interest) of 10.7%.

This is much lower than the level of 17% at the end of January, suggesting investors are less concerned about Portugal. Long way to go before the returns are below the threshold of 7% (considered the "danger zone" in the city), but an encouraging sign?

Operators can be calculated that Portugal will not need additional support. Or perhaps consider a second rescue plan does not discount for them (in the series of debt swap difficult Greek).

13:25:

A big thank you to those of you in Spain, who wrote about the impact of the recession in Spain double-dip in their lives in the comments below.

Some of our favorites:

staralfur

Madrid wrote:

Being the capital, the effect of the recession seems to be diluted. In our neighborhood cafes are always full, I do not think it is a "stereotype" of Spain. I'm Irish, and every time I'm back in Ireland, I am increasingly surprised at how easy it is to get the tables in a bar and restaurant on Saturday night. In my neighborhood, two new bars have opened recently, and the two make a great trade.

Unemployment is, of course, abound. Our company is in the midst of a new model and 90 people will lose their jobs over the next 8 months (although 120 more will come, are a different work area, so there will be little chance for the most redundant re-supply).

outside the city is of course a different story, people my age who have never worked and probably will not do for the next 10 years. Government reforms have simply made it easier to fire people, and is used as an excuse by companies to downsize and remain so.

Another reader

Saza disagree with the suggestions of long lunches of Spain ... also work and live in Spain, and two breaks for lunch that I've read here in the comments are competely unrealistic. It is clear that in Spain there is a gap slowly emerging between the haves and have-nots. Those who do so because they pay less tax than they should, do not pay national insurance for their employees, and spend the money saved after luxury cars and clothing. Those who are less and less, yes, the unemployed, but also ... employed by the state, for example, teachers, administrators, doctors, nurses, not only to receive their wages docked, but have their income tax increased in an effort to compensate those who have and do not pay their fair share. And I want to clarify something that the Guardian and the press in general can not comment on the government Rajoy took the opportunity to dismantle the social progress that Spain has in the last thirty years, particularly in name of economic problems.

Saza

More here. xxgorrasxx

questions the validity of data on unemployment in recent years:

living and working between Spain and the UK and I can assure you that the unemployment rate of 25% is not real. Many people work (in black they call it in Spain ... do not pay taxes) and get the money to the government on unemployment. The recession is very light compared to the UK one. I feel that Spain is fighting hard to get to South America and North African markets, and this is where Spanish companies are concentrated. In fact, they are better than the UK ... but there is a difference. Spain has not the Financial Times and the City, which is why they are attacked markets all the time.

Vercors wrote:

arrived in Spain five years ago, a year before the recession took hold. At that time, could cherry-pick some number of jobs in teaching permanent contract, who now works as a freelance "Contract" is the most viable option. As indicated above, the problem is that the right to self-employment means you are beating an income every month for large social security contributions are not adjusted above a certain limit, which is a huge disincentive for many.

I would also say that the thought of many Spanish tends toward the traditional preference for the use of an employer, which means that we are in crisis immediately if the employer is obliged to resort to restructuring. Despite all this, most seem to get ahead and be in reasonable spirits. In all cases, the social culture of going to bars and cafes acts as an antidote to bad times and people will family solidarity is still a significant cushion for young people.

Although

InSpain gives the idea:

Yet today, people do not go during the week - almost nothing -. As in the past, but still very busy weekend

is allowed to complain about the Spanish output, but after nearly 30 years promoting this sector as a growth area for employment supplemant the loss of manufacturing jobs as it seems any point completely wrong as if it was bad - therefore increased unemployment

mall owners who are currently sending up to 50% of the contractual rent agreed to retain tenants and have no empty space - spending has fallen dramatically - but people go for a walk

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