Spain has seen its recession deepen in the second quarter of the year as its GDP contracted by 0.4%, this coupled with record borrowing costs have escalated fears that Spain will find it increasingly difficult now to make good on its international loan commitments.

However there may be relief to hand for Madrid as Jean-Claude Juncker called on the ECB to cut Spanish debt costs. It is envisaged that a joint initiative between the EFSF and the ECB could reduce Spain’s’ borrowing costs.