Senior executives from Spain’s second-biggest bank, BBVA, met National Asset Management Agency officials yesterday as the Spanish authorities announced further details of a “bad bank” to purge toxic loans from its lenders, the Irish Times reported. Spanish bankers and government officials have been studying the Irish “bad bank” model as Madrid sets up a vehicle to acquire toxic real-estate loans and repossessed properties from the banks.

Spanish unemployment rose 1.7% in September from August, the country's labor ministry said Tuesday, evidence that unemployment in the euro zone's fourth-largest economy has yet to peak as Spain struggles to emerge from a deep contraction, The Wall Street Journal reported. More Spaniards have give up and are looking for work elsewhere.

Spain is ready to request a euro zone bailout for its public finances as early as next weekend but Germany has signaled that it should hold off, European officials said on Monday. The latest twist in the euro zone's three-year-old sovereign debt crisis comes as financial markets and some other European partners are pressuring Madrid to seek a rescue program that would trigger European Central Bank buying of its bonds, Reuters reported. "The Spanish were a bit hesitant but now they are ready to request aid," a senior European source said.

Spanish discount supermarket chain Dia is to acquire the Spanish and Portuguese arms of insolvent German drugstore chain Schlecker, it said on Friday, to diversify its product range and expand its presence in the two countries, Reuters reported. Dia has agreed to pay 70.5 million euros ($90.6 million) for Schlecker's 1,127 stores and three distribution centres in Spain and 41 stores and one distribution centre in Portugal. Schlecker filed for insolvency in January. The German company reported net sales of 318 million euros on the Iberian peninsula in 2011.

The Spanish government presented €13 billion ($16.7 billion) of spending cuts and tax increases for 2013 and said it will place new limits on early retirements as political turmoil heightens investor concerns over Prime Minister Mariano Rajoy's ability to slash a towering budget deficit and stabilize one of Europe's largest ailing economies, The Wall Street Journal reported. The government's budget plan for next year includes a share of the spending cuts and tax increases it presented in July designed to cut the deficit by €65 billion through the year 2014.

Spain's borrowing costs rose and its stock market fell sharply on the eve of Madrid's announcement of new austerity measures, putting the shaky economy again at the center of Europe's race to preserve its currency union, The Wall Street Journal reported. The government's 10-year borrowing costs rose nearly one-third of a percentage point, to above 6%, placing renewed pressure on Madrid to find a way out of its debt crisis and appearing to crimp its prospects for avoiding a bailout from its euro-zone partners.

The pressures facing the government of Prime Minister Mariano Rajoy mounted on several fronts on Tuesday, as thousands of demonstrators besieged Parliament and Spain’s two largest regions took steps that underscored their deepening economic troubles and displeasure with his austerity plans, the International Herald Tribune reported. Presenting the biggest domestic political challenge, the leader of Catalonia, Spain’s most powerful economic region, called an early election for Nov. 25 that could turn into an unofficial referendum on whether to split from the rest of the country.

EU authorities are working behind the scenes to pave the way for a new Spanish rescue programme and unlimited bond buying by the European Central Bank, by helping Madrid craft an economic reform programme that will be unveiled next week, the Financial Times reported. According to officials involved in the discussions, talks between the Spanish government and the European Commission are focusing on measures that would be demanded by international lenders as part of a new rescue programme, ensuring they are in place before a bailout is formally requested.

The Spanish government proved it can still finance itself on markets, despite mounting pressure for it to seek an international bailout, The Wall Street Journal reported. The Spanish debt agency Tuesday sold €4.57 billion ($5.99 billion) of short-term debt, slightly more than planned and at a cheaper rate than at previous auctions. The result showed that Spain, one of Europe's largest fiscally frail countries, is benefitting from the European Central Bank's pledge to throw its vast financial firepower behind future European bailouts.

Spain's government is facing an autumn of angry street protests by a recession-weary public, even after telling its European partners that its next steps to overhaul the economy would avoid further cuts in public spending, The Wall Street Journal reported. Finance Minister Luis de Guindos laid out Spain's position during weekend talks in Cyprus with his European colleagues, as tens of thousands of singing, chanting Spaniards converged Saturday on Madrid from all over the country to demand a popular referendum on the government's crisis measures.