“We fear that things are likely to get worse before they get better,” added Martin van Vliet, economist at ING Bank, in a separate report from Dow Jones Newswires. “The ongoing drag from real estate and the sheer scale of Spain’s planned fiscal adjustment mean that the recession will almost certainly deepen in the coming quarters, pushing unemployment to even more dramatic highs.”

The Spain ETF was down about 16% over the past three months heading into Monday’s trading.

Spain is in talks over a “bad bank” plan that would separate troubled real estate loans into one or more asset management companies to ease the burden on struggling lenders, the Financial Times reported.

iShares MSCI Spain Index Fund