Perilous
Times
27 January 2012 Last updated at 09:25 ET
Spain's unemployment total passes five million
BBC - Spain's unemployment figure passed the five million mark in
the last quarter of 2011, official figures show.
The National Statistics Institute said 5.3 million people were out
of work at the end of December, up from 4.9 million in the third
quarter.
The rate rose from 21.5% in the third quarter to 22.8% - the
highest rate in nearly 17 years.
Spain already has the highest jobless rate in the 17-nation
eurozone and is expected to slide back into recession.
Rising unemployment is a double blow for the relatively new
administration of Mariano Rajoy. The more people who are
registered as out of work, the more the Spanish government has to
pay out in unemployment benefits. And fewer people in work means
fewer people paying income tax, so less revenue for the
government.
On top of that, if people are not earnin, then they spend less and
that is driving Spain into recession.
Unemployment has been high ever since 2008, when Spain's housing
boom burst and thousands of people working in the construction
industry were laid off.
The Spanish government will soon announce labour reforms so that
employers can hire and fire people more easily.
The last time I went to talk to people at a job centre in Madrid,
people were waiting outside because there weren't enough chairs
inside.
The 22.8% rate is more than twice the average unemployment rate of
the eurozone, which stood at 10.3% in November, according to data
released earlier this month.
The Spanish figures show almost half of all 16-24 year-olds in the
country are jobless - 48.6% compared with 45.8% before.
Spain's new ruling Popular Party conservative government has
pledged labour reforms to try to improve the jobs market.
On Thursday, public service employees staged a series of
demonstrations across Spain to protest against unemployment and
increasing austerity measures.
Budget cuts
Spain has struggled since the property bubble burst in 2008.
In the years between 2004 and 2008, the average house price in
Spain rose 44%, Construction represented about 16% of GDP by the
end of the boom, and the unemployment rate was down to 7.95%.
However, rising house prices fuelled the sub-prime mortgage
market, leading the Spanish to borrow more as they struggled to
get on the housing ladder.
“ There are millions without hope - some people I know have been
without work for two years” - Marisol, Malaga
The downturn has seen repossessions of Spanish properties rise 32%
in the past year.
The range of austerity measures proposed by new Prime Minister
Mariano Rajoy's government angered many ahead of this week's
protests.
His measures include 8.9bn euros in new budget cuts, and tax
increases designed to boost government coffers by 6.3bn euros.
However, there are concerns that Mr Rajoy will be unable to meet
his pre-election pledge to cut the country's deficit to 4.4% of
GDP in 2012.
The Bank of Spain predicts the country's economy will shrink by
1.5% this year, saying the eurozone debt crisis has destroyed
business confidence and closed off bank credit, causing a large
drop in domestic demand.