News Summary: Europe fears Spain will need bailout

Associated Press
Journalists work at the Stock Exchange in Madrid Monday July 23, 2012. The Bank of Spain says the country’s recession-plagued economy contracted 0.4 percent in the second quarter, a performance even worse than in the first three months of the year.The central bank blamed a big drop in domestic demand: minus 1.2 percent compared to minus 0.5 percent in the first quarter as household and government spending fell at a faster pace. It stressed that these figures were preliminary. (AP Photo/Paul White)

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WORRIES 'R US: Europe's debt crisis flared on Monday as fears intensified that Spain would be next in line for a government bailout and Italy may not be far behind. Greece, still struggling with a mountain of debt, gets a visit from international creditors Tuesday.

SPAIN'S PAINS: A recession is deepening in Spain, the fourth-largest economy that uses the euro currency, and a growing number of its regional governments are seeking financial lifelines to make ends meet. The interest rate on Spanish government bonds soared in a sign of waning market confidence in the country's ability to pay off its debts.

TROUBLE SIGNS: Italy's economy is stagnating and markets are worried that it may soon be unable to maintain its debt burden, the biggest in the eurozone after Greece. Officials from the European Commission, European Central Bank and the International Monetary Fund are coming to see if Greece is living up to the terms of its bailouts.

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