Spain's jobless rate above 24 per cent

Spain's jobless rate climbs above 24 per cent

IANS     Madrid   Last Updated: May 2, 2012

The ranks of Spain's unemployed expanded by nearly 366,000 in the first quarter to a record 5.63 million, or 24.44 per cent of the workforce.

The number of households in which all members are out of work climbed by 374,300 to more than 1.7 million, according to the results of the latest workforce survey.

The government expects the unemployment rate to peak this year at 25 per cent, the Secretary of State for the economy, Fernando Jimenez Latorre, said after the jobless figures were released.

Spain's Foreign Minister, Jose Manuel Garcia-Margallo, told RNE radio the unemployment data showthe country is in a crisis of "enormous magnitude" and he urged the European Union to do more to promote economic growth.

"If it goes badly for us, it goes badly for them," he said. "This is like the Titanic: if there is a sinking here, even the first-class passengers sink."

Almost half of Spaniards between the ages of 18 and 24 are unemployed and the latest survey points to a fall in employment in the 25-29 age group.

Spanish unemployment is more than twice the median rate for the 27-member EU.

Spain's gross domestic product shrank 0.4 per cent in the first three months of this year after contracting 0.3 per cent in the fourth quarter of 2011, the central bank said Monday.

Two consecutive quarters of negative growth is the technical definition of recession.

Friday's unemployment report was the first since Prime Minister Mariano Rajoy's conservative government overhauled Spanish labour law to make it easier for firms to hire and fire workers, hoping to spur job creation.

The government has always said it did not expect the overhaul to have an immediate effect on the jobless rate, Jimenez Latorre noted.

The 2012-2015 Stability Program approved at Friday's Cabinet meeting envisions growth of 0.2 per cent in 2013 and an easing of the unemployment rate to 24.2 per cent, Economy Minister Luis de Guindos said at a press conference.

He also reiterated the Rajoy administration's commitment to reducing the budget deficit from 8.5 per cent of GDP to 5.3 per cent this year and to 3 per cent of GDP in 2013.