Spain: Economic pain to deepen despite bank rescue

Associated Press
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File - In this May 14, 2012 file photo, riot police stand guard in front of a branch of the recently nationalized Caja de Madrid/Bankia bank during a protest in Madrid. Spain could ask for a European rescue of its troubled banks this Saturday June 9, 2012 when European finance ministers hold an emergency conference call to discuss the nation's hurting lending sector, a move that would turn the nation into the fourth from the 17-nation eurozone to seek outside help since the continent's financial crisis erupted two years ago. (AP Photo/Alberto Di Lolli, File)

MADRID (AP) — Spain's prime minister says his country's deep economic misery will worsen this year despite the country's acceptance of a European financial lifeline of up to €100 billion ($125 billion) to rescue its hurting banks.

Mariano Rajoy says Spain will stay stuck in its second recession in three years, and unemployment will rise above the current level of nearly 25 percent — the highest among the 17 nations that use the common euro currency.

Rajoy told reporters Sunday that his decision to ask for outside help a day earlier was difficult but will save the country from total economic devastation while strengthening the shaky status of the European Union.

He refused to call the rescue package a bailout, saying it is different from those received by Greece, Italy and Portugal.