Spanish unemployment tops 6 million
Madrid, April 25, 2013
More than six million Spaniards were out of work in the first quarter of this year, raising the jobless rate in the euro zone's fourth biggest economy to 27.2 per cent, the highest since records began in the 1970s.
The huge sums poured into the global financial system by major central banks have eased bond market pressure on Spain, but the cuts Madrid has made in spending to regain investors' confidence have left it deep in recession.
Unemployment - 6.2 million in the first quarter - has been rising for seven quarters and the latest numbers will fuel a growing debate on whether to ease off on the budget austerity which has dominated Europe's response to the debt crisis.
"These figures are worse than expected and highlight the serious situation of the Spanish economy as well as the shocking decoupling between the real and the financial economy," strategist at Citi in Madrid Jose Luis Martinez said.
The collapse of a property boom driven by cheap credit has seen millions in the construction sector laid off since 2009 and private service sector, worth almost half gross domestic product, has followed as Spaniards tightened purse strings and investment plummeted.
The malaise has been made worse by billions of euros in state spending cuts and tax hikes to reduce one of the euro zone's highest deficits and convince nervous markets Spain can control its finances.
Spain and Italy's costs of borrowing hit their lowest in more than two years this week and EU officials have begun to talk openly of easing up on deficit targets.
Prime Minister Mariano Rajoy said earlier this week that a new reform plan, to be announced on Friday, would not include more austerity measures in an effort to calm increasingly desperate Spaniards and reassure investors the country will soon be able to grow.
Protests have become commonplace across the country and thousands of police have been drafted in to Madrid to handle a march on Parliament on Thursday.
But few believe the government's plans will be ambitious enough to restart the ailing economy and create jobs. The International Monetary Fund sees Spanish unemployment at 26.5 per cent next year. – Reuters
More INTERNATIONAL NEWS Stories
- No sign of missing plane; Malaysia probes false passports
- Two Europeans not on board 'missing' Malaysian jet
- China draws red line on North Korea
- Saudi sentences three to death for 2003 bombing
- First bitcoin machine opens in UK
- US sanctions will boomerang, warns Russia
- China plans $50bn bank to fund projects
- Sony to sell Tokyo 'birthplace'
- Obama orders sanctions over Russian moves
- Crimea parliament votes to join Russia
- Arab League to be revamped
- 'Upskirting' is legal: Massachusetts court
- Singapore probes 'unnatural' death of bitcoin trader
- Onus on world powers for Syria war crimes: UN
- US, Russia set for talks on Ukraine crisis
- Brent oil drops below $109
- Services outshine manufacturing, pushing up jobs
- Bitcoin bank shut down after hacker attack
- India to kick off world's biggest poll on April 7
- China signals focus on reforms
- Hundreds ready for bitcoin exchange class action
- Space taxi, Jupiter mission in Obama budget
- Putin: Use of force last resort in Ukraine
- Powers to boost Lebanese military, economy
- Egypt bans Hamas activities in Egypt
- Putin ends army exercise, markets rally
- Russia has violated international law: Obama
- Russian markets hit as Putin tightens grip on Crimea
- Iran nuclear deal 'being implemented as planned'
- Global factory growth stumbles as demand falters