Sickly economic growth figures and a breathing space for stocks in Italy and Spain on Friday failed to dispel investor nerves in a crisis that has sparked panic selling on financial markets. Italy\'s economy gathered some pace with the growth rate rising to 0.3 percent in the second quarter from 0.1 percent in the first quarter, while Spain expanded by only 0.2 percent after 0.3 percent in the first three months.\"If countries have high debt they have to grow otherwise the debt becomes unsustainable. This is a crucial point and is the reason why Italy and Spain have become targets\" said Chiara Corsa, an economist at Italian bank UniCredit.She added: \"The situation in Italy is maybe worse than in Spain which has already done a lot since Italy has a structural problem\" with bureaucratic obstacles, tax issues and a lack of flexibility in the labour market.The Italian and Spanish stock exchanges both fell sharply at the start of trading but then recovered strongly amid market rumours that the European Central Bank (ECB) was intervening to shore up their badly-damaged bond markets. There was criticism in Italy meanwhile of Berlusconi\'s promise on Thursday to come up with a comprehensive plan of reforms by September to boost the Italian economy and see the country through the debt crisis.\"September is too late,\" said Ernesto Auci, a commentator for the financial website firstonline.info. \"Berlusconi continues to refuse to acknowledge the vote of no confidence in his policies from the markets,\" he said.Business daily Il Sole 24 Ore said Italian stocks were \"on a rollercoaster\". Shares in Italian insurance giant Generali were down 2.67 percent at 11.68 euros after the company said its net profit had fallen in the first half of the year due to its Greek bond holdings and its stake in Telecom Italia.Profits fell 7.7 percent to 805.5 million euros ($1.1 billion), Generali said. Italy\'s growth result was in line with analyst expectations but was balanced out by an unexpected 0.6-percent decline in industrial production in June. Analysts polled by Dow Jones Newswires had forecasted a 0.1-percent rise. Investors are worried about Italy\'s high public debt and low growth rate as well as a lack of structural reforms and tensions within Berlusconi\'s coalition that have fuelled rumours that Economy Minister Giulio Tremonti could resign.Spain has also been labouring under low growth and high unemployment. The Bank of Spain said the growth data suggested \"a weakening of activity in an environment marked by the deepening eurozone sovereign debt crisis.\"As in the first quarter, exports allowed Spain to show growth despite weak consumer spending and investment at home.Spain\'s staggering unemployment rate -- 20.89 percent in the second quarter of 2011 -- has helped to whip up a nationwide \"indignant\" protest movement against the pain caused by the economic slump.