At the Leganes toll booth outside Madrid, the workers scan the horizon for cars. In Spain's recession, the stream of paying drivers has slowed to a trickle and the toll road is all but bankrupt. Like the housing bubble, pumped up until it burst in 2008, and its speculation-funded phantom airports, the folly of Spain's road-building boom too is now being laid bare in vast stretches of tarmac, Agence France-Presse reported. "Right now we can't meet our debt repayments.

Spanish telecom giant Telefónica SA, one of the world's most indebted companies, could establish two units—one in Latin America and one in Europe—to protect itself from any further worsening of Spain's economic troubles, its chief financial officer said, The Wall Street Journal reported. The company, among Spain's largest by market capitalization and a once-proud symbol of its boom-time expansion, is immersed in the country's troubles.

European authorities are pushing Bankia group to impose losses on junior debtholders as part of Spain’s bank bailout by swapping their securities for stock in the nationalized lender, two people with knowledge of the matter said, Reuters reported. The European Central Bank and European Commission want investors including preference shareholders to accept newly issued shares in exchange for their existing securities to help reduce the cost to the taxpayer of Spain’s 100 billion-euro ($130 billion) bank rescue, said the people, who declined to be named because the matter isn’t public.

The Madrid region has been pushed further towards requesting a bailout from Spain’s regional government rescue fund after it pulled a planned debt sale amid limp investor demand, the Financial Times reported. The failure to sell bonds by the Community of Madrid, which has the second-highest credit rating of Spain’s 17 regional governments, came after Moody’s downgraded the debt of five other Spanish regions, including the economic powerhouse of Catalonia.

Bankia and three other Spanish lenders will win European Union approval for government bailouts by the end of November, EU Competition Commissioner Joaquin Almunia said, Bloomberg reported. “The Bank of Spain, the Commission and the management of the four entities have been working on their restructuring plans during the summer, and the commission will take a decision approving them by the end of November,” Almunia said in the text of a speech he gave in Barcelona today.

Spain's debt costs retreated further from their dangerous summer highs Thursday, helped by favorable ratings news and growing hopes that the government will request a bailout, The Wall Street Journal reported. A Spanish bond auction attracted solid demand after Moody's surprised investors late Tuesday by leaving Spain's investment grade rating unchanged. It was widely expected to relegate it to junk status. Moody's pinned its decision on the increasing likelihood of the country asking for financial assistance from the European Union.

Spain has set a €90 billion limit for the size of a bad bank created to take over other financial entities’ toxic real estate assets, a necessary step to obtain European funding for the sector, the Irish Times reported. The country is preparing to receive the first funds from a €100 billion credit line for its banks agreed with Europe in June, paving the way for a fuller bailout that is likely to dominate talks at a European Union summit starting today.

Euro-zone governments are counting on the European Central Bank to provide most of the firepower if Spain requests a bailout, with only a modest contribution coming from the bloc's bailout fund, senior officials said, The Wall Street Journal reported. The governments hope to earmark significantly less than €100 billion ($131 billion) from their €500 billion bailout fund if Spain requests help, the senior euro-zone officials said.

A potential Spanish request for financial aid is becoming caught up in tangled diplomacy between euro-zone capitals, despite Madrid's new willingness to push ahead, The Wall Street Journal reported. A day after a senior Spanish official told reporters that German concerns were preventing Madrid from seeking assistance, German officials insisted Spain hadn't indicated it wants aid. Italy, meanwhile, continued to urge Spain to apply for help in the hope that the step would ease market pressure on its own bonds.

A Spanish court has accepted a filing for bankruptcy from two investment firms that own 31 percent of French property company Gecina, Reuters reported. Alteco and MAG Import filed for bankruptcy on Oct. 3 after a bank refused to refinance a 1.6 billion euro ($2 billion) loan, leaving nearly a dozen lenders exposed. Alteco and MAG Import met conditions for voluntary bankruptcy, two Spanish mercantile courts said in documents released on Tuesday. French bank Natixis has the most exposure to the loan, at 266 million euros.