MADRID, May 9 (Reuters) - The Spanish government opposes the hostile takeover bid made on Thursday by Spanish second largest bank BBVA on smaller rival Sabadell, a source at the Economy Ministry said.

The source said the government considers the merger would have potential harmful effects on the Spanish financial system and would impact jobs and customers.

BBVA on Thursday presented a 12.23 billion euro ($13.11 billion) takeover bid for Sabadell directly to shareholders, even though Sabadell's board this week already rejected the proposal on the same terms. (Reporting by Emma Pinedo, editing by Inti Landauro)