As the Spanish government got its €65bn austerity package passed in Parliament, millions of people took to the streets in unprecedented demonstrations against cuts on July 19. The day after, as the Valencian regional government asked for a central government bail out (of 3.5bn euro), the risk premium on Spanish bonds hit a new record, while 10 year bonds were yielding 7.3%. The Spanish economy is on the verge of a full bail out.

Last night over 150,000 people turned out in Madrid to receive the coal miners who have marched for 18 days to cover the 400 km separating their home regions from the Spanish capital. A huge crowd of tens of thousands (the Madrid secretary of CCOO union put the figure at half a million) showed their solidarity with raised fists, revolutionary slogans and songs, and accompanied them from Ciudad Universitaria all the way to the Puerta del Sol square which the indignados  have filled often in the last one year of struggles.

After having sworn there was no need for it, finally the Spanish government of Rajoy was forced to ask for European help to bail out the banking system. On Saturday, June 9, the European Union agreed to deliver up to 100 billion euro to help rescue Spanish banks.

May ended in Spain with frantic attempts to prevent the collapse of the banking system, saddled with a massive amount of toxic loans linked to the housing bubble. The government attempted to involve the European Union in the rescue of Bankia, while there were rumours of IMF plans for a bail out of Spain. Meanwhile miners have gone out an all out strike in defence of jobs.

In the last few days Spain has been again in the eye of the storm of the European economic crisis. What is really at stake is the unravelling of the deep crisis of Spanish capitalism with profound social and political consequences and its impact in the rest of European and world economy.

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