A killer bacteria linked to Spanish cucumbers is claiming victims all around Europe, but the news couldn't come at a worse time for the struggling country.

Already 17 people have died and 1,500 have fallen ill, including a handful of victims in around Europe. Additionally, the World Health Organization announced that the strain of E. coli involved is a never-before-seen mutation.

But these woes are just one of many for the country.

Protests have erupted in Spain in recent weeks as the country sees fast eroding economy, high unemployment and the government's draconian austerity measures that affect mostly the middle class.

Financial markets are also growing increasingly skeptical that Spain can steer clear of the crisis as the country struggles with to reform its labor markets.

Markets are surprised that the government may not be capable of concluding a much needed labor reform ... Until we finish that reform we won't see the end of market distrust, said Jose Manuel Gonzalez-Paramo, Executive Board member of the ECB, in an interview in La Vanguardia newspaper on Sunday.

The outbreak is threatening Spain's fragile economy as it vies to recover,  and unemployment surges to over 21 percent. Investors are fearing it will be the next euro zone member following Portugal to call for a bailout.

[The economic crisis] destroyed thousands of jobs,Prime Minister Jose Luis Rodriguez Zapatero after his party was recently crushed in heavy regional election losses .

It is a crisis that had profound effects on citizens' morale. I know that many Spaniards suffer great hardship and fear for their futures. Today, without doubt, they expressed their discontent.

One of the largest E.coli outbreaks of its kind, it has also made more than 1,000 people ill in Germany as well as people from Spain, Sweden, Britain, Denmark, France and the Netherlands who had recently been in Germany.

The outbreak is not doing wonders for Spain's political ties with its neighbors tensions grow between Germany and countries such as France and Russia.

Russia has banned vegetable imports from Germany and Spain and said it may expand the ban to all European Union member states, head of Russia's Federal Consumer Protection Agency Gennady Onishchenko was quoted by corporate-owned Interfax news agency as saying.

Spanish farmers are losing around 200 million euros (174 million pounds) per week in lost sales because of it, a farmers association said on Tuesday.