As first quarter financial results are published, the official verdict for Spain is: back in recession. All signs of the very modest return to growth seen at the beginning of last year are gone and the shadow of the EU bailout now extends across the Iberian peninsula, with more and more predictions that Spain will soon join Portugal in needing rescue funds.

Spanish Central Bank governor Miguel Ángel Fernández Ordóñez has had an unenviable position over the last few days, warning that the Spanish government could soon struggle to meet its financial commitments, while attempting to defend unpopular reforms and offer hope that further catastrophe can be avoided.

Ordóñez denied the need for an EU bailout, saying there are “thousand of possibilities,” but clearly others are not convinced. He also urged patience, and said austerity measures and labor reforms would take time to bring positive results, amid widespread fears that these measures are killing growth and pushing Spain further into recession.

The idea of an alternative to a full blown bailout, such as those for Greece, Portugal and Ireland, where European funding would help recapitalize Spain's banks has been bandied about. He responded to charges that the economic reform of Spain had derailed by adding that, “the cleaning up, restructuring and recapitalization of Spain's credit system has not lost any impetus.”

Liam Lever, liam@romania-insider.com