European Parliament president Martin Schulz warned on Saturday that Spain's economic crisis could spark a "social explosion" across the continent.

"The demonstrations in Spain show that a social explosion is looming because of the high unemployment rate among young people in Europe," Schulz told the wide-circulation German daily Bild in an interview published on Saturday.

He called for the rapid implementation of "new European programmes to finally create more jobs for this generation."

The Social Democrat said however that Spain was better placed than Greece to weather the crisis, since it "has a solid industrial base and a well-organised public administration."

The Spanish government said on Friday that the recession will drag on through 2013 and raised its unemployment forecast for this year to 24.6 percent at a time when the country is facing panic on the markets and unprecedented social discontent.

Hundreds of thousands of Spaniards took to the streets on Thursday to vent frustation over a government that seems to have no more room for manoeuvre to turn the economy around.

Spain's massive bank bailout, which could reach 100 billion euros ($120 billion) and was formally approved Friday by the eurozone, did not seem to calm the markets over the country's financial outlook.