Felipe Gonzales, the former prime minister of Spain, has warned that the country is in "a situation of total emergency, the worst crisis we have ever lived through".

Paul Mortimer Lee, a former Bank of England official, says the first thing Spain need to do is make a "very thorough assessment" of the losses to the banking system.

"If it means going to the IMF they should go to the IMF", he told the Today programme.

What is likely to happen, he believes, is that Spain will "come under extraordinary pressure" from other governments to "get the cash to sort their banks out".

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