Spain's Economy Minister Luis de Guindos has told Reuters that the country will "absolutely not" need a bail-out. Spain has already been granted up to €100bn in aid for its battered banks. Asked about this possibility on the sidelines of a congress hearing about the European aid to ailing Spanish lenders, De Guindos said: "Absolutely not." 10.00 Spanish stock markets have now fallen 4.5pc today, while in Italy, shares are down by 3.3pc. The FTSE 100 in London has dropped 1.6pc. 09.49 Back to Spain, where the economy posted a 0.4pc contraction in the second quarter, a sharper fall than the 0.3pc contraction recorded in the first three months of the year, according to the Bank of Spain. 09.42 More harsh language from the Germans this morning. German MP Alexander Dobrindt has called for Greece to start paying half of its pensions and state salaries in drachmas as part of a gradual exit from the euro zone. He told Die Welt: With Greece we have reached the end of the road. There must not be any further aid. A country which does not have the will to fulfil the conditions, or is not able to do so, must get a chance outside the euro. Mr Dobrindt has long called for Greece to exit the euro. 09.32 The Athens Stock Exchange has fallen by 2.7pc this morning. Simon Denham at Capital Spreads comments: This realisation that you are probably better off simply putting the money on a large bonfire as opposed to giving it to the Greek government is a signal that there is little faith in country being able to meet its debt target by 2020. With the IMF saying enough is enough the EU is going to have to fill the hole at a time when its resources are already being stretched to the limit by Spain requesting €100 billion only recently. Needless to say the yields on the country's ten year bond spiked to a record high causing a sell off of all risk assets and in particular a pummelling for the single currency. A major worry now of course is whether Italy will be next as its bond yields continue to slide down their slippery slope. This is such an unknown as far as the amount of funds the country would need in respect of a bailout as its crippling debts and the size of its economy dwarf those of the periphery. Italy is a G6 country with liabilities that stretch across the globe. 09.20 Let's not forget where this all started - in Greece. Yesterday, German Vice Chancellor Philipp Roesler repeated the EU ultimatum to the debt-laden country: no austerity = no bail-out cash. In remarkably frank language, Mr Roesler said he was "very sceptical" that European leaders would be able to save Greece. He told German broadcaster ARD: What's emerging is that Greece will probably not be able to fulfil its conditions, What is clear: if Greece doesn't fulfil those conditions, then there can be no more payments. 09.16 The protests in Spain have attracted high profile support. Here's actor Javier Bardem joining protests last Thursday. The No Country for Old Men star marched under a banner which read, "Culture is not a luxury." Spanish actor Javier Bardem and his brother Carlos applaud as they attend a protest against government austerity measures in Madrid last week. The placard reads, "Our cuts will be with a guillotine" (Photo: Reuters). 09.06 Conservative MP John Redwood offers his two-pence on the Spanish crisis in a blog this morning: Last week the whole argument over keeping the Spanish state safe from banking excess was overwhelmed by the news that Valencia needs help. Catalonia, Murcia and others may also in due course want similar assistance. The Spanish provinces have devolved responsibility for big spending areas like health and education as well as more traditional devolved matters in a European federal EU member. As a result the federal government's austerity packages, demanded by the Euro bosses, of necessity demand substantial cuts in regional spending as well as in federal government spending. There is little love lost between the main regions and the centre. There is even less when the national government demands cuts. Some of the cuts are proving too painful or difficult. As a result the regions are now asking for some relaxation of the discipline, and at the same time saying they need help from central government to borrow the money they need. 09.02 Spain approved measures this month allowing larger shops to open for 25pc longer a week. This from Bloomberg: The new rules may encourage the outlets to sell during the traditional afternoon snooze from 2pm to 4pm, and on an additional two Sundays or holidays a year for a total of ten. "When everything was fine, nobody complained, but now that things have gone awry, then it's another story," said Carmen Cardeno, director general for domestic commerce at the nation's economy ministry, which created the rules. We need to evolve and be more flexible. 08.59 Another victim of the debt crisis has emerged this morning: 08.45 On Friday, Valencia became the first Spanish region to seek a bail-out from a new fund setup by the Spanish central government, which is itself under heavy financial strain. Later that evening, El Pais reported that six more regions had joined the bail-out queue - Catalonia, Castilla-La Mancha, Baleares, Murcia, the Canary Islands and Andalusia. On Sunday, the head of the local government in Murcia said in an interview that the region would be the second to make a formal request for aid. Ramon Luis Valcarcel said that he hoped that the cash injection would be available for September. This morning, business daily El Confidencial reports that Catalonia will request €3.5bn from the bail-out pot. And here we are today... 08.36 After falling almost 6pc on Friday, the IBEX 35 in Madrid fell by 3pc this morning to 6,062.30, while the FTSE Mib in Milan has fallen 2.6pc to 12,728.31. London's benchmark FTSE 100 index edged down 1.3pc to 5,578.77. The yield on 10-year Spanish government bonds hit 7.53pc this morning - a euro-era high. Meanwhile, for the first time since the beginning of 2009, it now costs Italy more to borrow than it does Ireland (6.348pc v 6.2797pc). 08.31 Stock markets have tumbled this morning on the back of reports over the weekend that several Spanish regions are lining up with their begging bowls to tap a special €18bn funding pot designed to help struggling regions meet commitments. 08.30 Good morning and welcome back to our live coverage of the European debt crisis.