Eurozone crisis live: Spanish crisis deepens as recession confirmed

Spain has suffered a double-dip recession, with GDP falling by 0.3% in the first quarter of this year

8.30am: As regular reader meljomur points out in the comments below, Britain also slipped back into a double-dip recession last week.

By my reckoning, there are now seven eurozone countries in recession.

The other six are Belgium, Ireland, Italy, the Netherlands, Portugal and Slovenia — whose economies all shrank in the third and fourth quarters of 2011.

Spain and the UK are among the first countries to report data for the first three months of 2012.

8.20am: The news of Spain’s recession (see 8.05am) has long been expected. This graph shows how it only managed weak economic growth through 2010 and most of 2011, before beginning to contract last autumn.

The red bar charts show quarterly GDP changes, while the blue line tracks the year-on-year change.

8.05am: It’s official – Spain has suffered a double-dip recession.

The Instituto Nacional de Estadistica has announced that the Spanish economy shrank by 0.3% in the first three months of 2012. That follows a 0.3% contraction in the final three months of 2011.

That puts Spain back into recession for the first time since it returned to growth at the start of 2010. The 0.3% contraction is actually slightly better than analysts had forecast.

On an annual basis, Spain shrank by 0.4% in the last quarter.

The full details are here on the INE website (pdf, in Spanish).

7.58am: With impeccable timing, Standard & Poor’s just announced that it has taken ‘negative actions’ on 16 Spanish banks, following last Friday’s two-notch rating downgrade.

Details here.

7.50am: Good morning, and welcome to our rolling coverage of the eurozone debt crisis.

We’re focusing on Spain this morning. The latest Spanish GDP data will be released in the next few minutes, and it is certain to confirm that Spain has fallen back into recession.

The data (due at 9am CEST, or 8am BST) will heighten the pressure on the Madrid government, following last Friday’s credit rating downgrade. Yesterday, unions organised marches in cities across Spain in protest at the government’s economic plans.

Elsewhere today: political tension is rising in France and Greece ahead of this weekend’s elections. Fran├žois Hollande launched a message of defiance against Angela Merkel over the eurozone fiscal pact yesterday, leaving France’s likely next president on a collision course with Germany’s chancellor.

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