MADRID – Spain announced on Friday that its jobless rate has surged to a 13-year record, above 20 percent at the end of 2010, the highest level in the industrialised world. The resulting unemployment rate was 20.33 percent for the end of year, easily exceeding Prime Minister Jose Luis Rodriguez Zapatero’s target of 19.4 percent.
It was more bad news for an economy fighting to regain trust of financial markets and trying to escape a debt quagmire trap that has engulfed Greece, Ireland and now menaces Portugal. Another 121,900 people joined Spain’s unemployment queues in the final quarter of the year, pushing the total to 4.697 million people, said the national statistics institute INE.
Spain appears to be stuck in a rut of staggeringly high levels of unemployment. After posting a jobless rate of 18.83 percent in 2009 and now 20.33 percent in 2010, the government is forecasting 19.3 percent for 2011 and 17.5 percent in 2012. The Spanish economy, the European Union’s fifth biggest, slumped into recession during the second half of 2008 as the global financial meltdown compounded collapse of a labour-intensive construction boom. It emerged with tepid growth of just 0.1 percent in the first quarter of 2010 and 0.2 percent in the second, but then stalled zero growth in the third.
Zapatero has said that the fourth quarter will show positive growth which would pick up team in 2011. However, he warned that job creation would be far from what is needed and desired. Last month, the government announced that it would scrap a $568 monthly subsidy for the long-term unemployed, as it cuts spending to slash the public deficit and ease fears that it will need an EU bailout. The government forecasts that a 0.3 percent drop in growth this year will be followed by expansion of 1.3 percent in 2011.
Madrid estimates that 70 percent of the two million jobs lost in Spain since the start of the economic downturn were directly or indirectly related to the construction sector. Last year, the government introduced a hotly contested labour market reform that cut the country’s high cost of firing workers and gave companies greater flexibility to reduce working hours and staff levels in economic downturns changes that it argued would boost job creation.
Spaniards see unemployment as Spain’s biggest problem and one in two, 49.8 percent, fear that the jobless situation will get worse, a poll published by the CIS research firm this month showed. The Workers’ Union (USO), a medium-sized union, called on the government to focus on employment instead of pushing through reforms and rising the retirement age from 65 to 67.
“There is no point guaranteeing the future of pensions if there is no work,” it said in a statement. Eight policemen were slightly injured in Madrid late Thursday in clashes with demonstrators protesting the planned pension reforms.
Spanish PM in trouble as joblessness surges to 20.33pc
