Already living in Germany's shadow, the French economy is increasingly losing ground to southern Europe and Spain in particular, despite efforts by President Francois Hollande to claw back France's competitive edge, Reuters reported in an analysis. Though Hollande has reforms in the works to trim France's high labour costs and introduce more flexibility into the jobs market, the moves stop far short of what Spain has done.

Spanish Prime Minister Mariano Rajoy said he would send parliament a plan to stimulate the economy and put young people back to work, his government's first big initiative to ease the pain of a long-running economic crisis that deepened in the final quarter of last year, The Wall Street Journal reported. Spain's fourth-quarter gross domestic product fell 0.7% from the third quarter and 1.8% from the year-earlier period, the National Statistics Institute said in a preliminary reading on Wednesday. Output for the whole of 2012 fell 1.4% from 2011, it said.

The few listed Spanish property firms to survive a brutal real estate crash are stepping up the fight with banks for more generous debt relief to outlast a crisis that could yet have years to run, Reuters reported. Companies must persuade banks that have already been forced by the government to write down property loans to cut their debt to reflect the plummeting value of the assets linked to it or simply to give them more time. But property prices have dropped by some 30 percent since a building boom collapsed in 2008, crippling Spanish banks that were heavily exposed to the sector.

Spain's unemployment rate reached a record 26% in the fourth quarter, the latest sign of deepening recession even as growing investor appetite for the country's government bonds brings relief from the country's debt crisis, The Wall Street Journal reported. Data released Thursday by the National Statistics Institute showed the economy continued to shed public- and private-sector jobs in the final quarter of 2012 as the government worked to slash a big budget deficit.

The Spanish government will on Friday present an ambitious plan to reverse the fragmentation of the country’s internal market by taking aim at the web of business rules and regulations imposed by Spain’s autonomous regions, the Financial Times reported. Madrid hopes the proposal will give a much-needed boost to the country’s economy, and improve Spain’s lacklustre reputation as a business destination.

Spanish and Irish funding costs continued to ease at debt auctions Thursday, with investors increasingly confident that both euro-zone countries may be over the worst of their financial problems, The Wall Street Journal reported. Spain sold its maximum targeted €4.5 billion ($5.98 billion) worth of bonds amid signs that it doesn't currently need financial support offered by the European Central Bank to meet its funding needs.

There's a glimmer of hope for the euro zone's fourth largest economy, even though the International Monetary Fund expects Spain to remain in recession through much of 2013, Reuters reported in an in-depth report. As domestic demand has slumped, some companies have converted themselves into exporters. Latin American markets have been a prime target for Spanish companies because of their language advantage, and giants such as Telefonica and Banco Santander have increased their exposure there to compensate for problems in their domestic market.

The Spanish government may remove a clause from its bailout fund for cash-strapped regions that gives it first claim on their revenue, according to two people familiar with the matter, Bloomberg reported. The move is intended to placate creditors who have told officials that the introduction of the regional bailout fund in July 2012 changed the terms of their bond holdings and gave them the right to call in the debts, one of the people said. Legislation may be approved as early as this month to clarify seniority, said the two people who asked not to be named because the talks are private.

Spain has been quietly tapping the country's richest piggy bank, the Social Security Reserve Fund, as a buyer of last resort for Spanish government bonds, raising questions about the fund's role as guarantor of future pension payouts, the Wall Street Journal reported today. At least 90 percent of the €65 billion ($85.7 billion) fund has been invested in increasingly risky Spanish debt, according to official figures, and the government has begun withdrawing cash for emergency payments.

Local governments across Spain, facing a steep drop in revenue and largely unable to borrow from banks or financial markets, have been paying suppliers of goods and services months behind schedule, the Wall Street Journal reported on Saturday. By the end of October, regional governments had accumulated bills in 2012 for providers, interest payments and other obligations totaling €13.7 billion ($18.1 billion), more than 1 percent of Spain's gross domestic product, a government report found.