Spain's prime minister said Sunday that despite financial assistance of as much as €100 billion ($125 billion) for the country's ailing financials sector, the euro zone's fourth-largest economy will continue to suffer from high unemployment and shrinking gross domestic product.
This year is going to be a bad one, Prime Minister Mariano Rajoy said in a press conference. He reaffirmed the previous forecast of a 1.7 percent fall in GDP this year. The country's government forecast a 24.3 percent unemployment rate in March, and Spaniards under 25 have a 52 percent unemployment rate.
Rajoy has cut government programs and raised taxes to combat the deficit, leading to protests.
Spain is the fourth and largest country in the euro zone to accept financial assistance, joining Greece, Ireland, and Portugal. Rajoy stressed that the aid was limited to the country's banks, which have been weighed down by the global recession and toxic real-estate holdings, and he avoided the term bailout.
Spain previously nationalized Bankia SA, which requested a rescue in the amount of €19 billion ($24 billion) last month. The country won't be subject to outside economic controls because of its agreement on Saturday to accept financial aid from one or both of the euro zone's bailout funds -- and the International Monetary Fund will not be providing any of the financial assistance. Rajoy had resisted outside assistance, but said Sunday that he was the one who initiated it.