Austerity drive to be forced on Spain after deficit larger than first expected

Spain will be forced to make massive cutbacks next year to bring its budget into line with strict new EU rules, despite missing targets for two years, eurozone ministers decided last night.

They are expected to finally sign off on the second Greek bailout on Wednesday, after German politicians in the Bundestag vote on it.

The money will be put into an escrow account with creditors having preferential access before money goes to fund the Greek state. This arrangement will remain until the government introduces this rule into law.