Pressure grows on EU leaders to relax strict austerity
Spain on course for another recession after GDP contracted 0.3% at the end of last year, while the cost of insuring Portuguese debt has hit a new record
Pressure on EU leaders to relax their insistence on strict austerity measures intensified on Monday after Spain revealed that its economy contracted in the last three months of 2011 and the cost of insuring Portugal’s debt soared to a record high.
Spain’s output dropped by 0.3% during the fourth quarter of 2011 compared with the previous three months, according to official data, confirming the view of the prime minister, Mariano Rajoy, that the economy is sliding into recession.
Pictured: Spanish PM Mariano Rajoy held talks with European commission president José Manuel Barroso on Monday. Photograph: John Thys/AFP/Getty Images