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More gloom for Spain's economy

Monday, April 16, 2012 - 02:01

April 16 - Spain's Economy Minister has admitted the country has probably tipped into its second recession since 2009 as government debt yields climbed back to dangerous levels. Hayley Platt reports.

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It's been run by the same family for 15 years but now this homeware shop in Madrid is closing. Cesar Calle says he's been beaten by the Spanish economy. (SOUNDBITE) (Spanish) CESAR CALLE, OWNER OF TE CON LIMON HOMEWARES STORE, SAYING: "To sum it up, we sell less, we have more outgoings, it's unsustainable - we can´t keep up." Spain has acknowledged it's probably tipped back into recession for the second time since 2009. On Monday Spanish debt headed towards crisis levels and concern is growing that the euro zone's fourth biggest economy may need a bailout. 10-year bond yields topped the key six percent level as investors feared Spain would not be able to keep it's budget in check. Safe-haven German bonds also hit record highs and the euro slumped to a two-month low against the dollar. But Patrick Armstrong, from Armstrong Investments, says the outlook may not be as bleak as Cesar's. SOUNDBITE: Patrick Armstrong, managing partner, Armstrong Investments, saying (English): "Spain's in a position where it doesn't have too much debt in comparison with other periphery countries but even in the broader euro zone, Spain's running about 80/85 percent of debt to GDP which I think it can get there at a sustainable level." Maybe - but it'll be too late for Cesar and his loyal customers (SOUNDBITE) (Spanish) CESAR CALLE, OWNER OF TE CON LIMON HOMEWARES STORE, SAYING: "My grandparents, may they rest in peace, used to say, being thankful is being well brought-up, so I have tried to be thankful, with a touch of irony, so my thanks everyone who has helped and is helping us close-down." (SOUNDBITE) (Spanish) PILAR, SHOPPER, SAYING: "It's a shame, evidently we are all taking advantage of low prices, but there is no doubt it's a shame they are closing down." (SOUNDBITE) (Spanish) JESSICA BENITEZ, SHOPPER, SAYING: "The way things are now, of course you show support, I'm also looking for work, things aren't easy." Cesar's prospects don't look good either. Spain has the highest unemployment rate in Europe with almost one in four adults out of work. Hayley Platt, Reuters.

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More gloom for Spain's economy

Monday, April 16, 2012 - 02:01