MADRID – The number of people out of work in Spain has soared past the 5 million mark with the jobless rate shooting up to almost one in four people, officials said Friday, further highlighting the depth of the country’s economic crisis and increasing pressure on the new government to introduce serious reforms.
Spain’s National Statistics Institute reported that 5.3 million people were jobless at the end of December, up from 4.9 million in the third quarter — a jump in the unemployment rate from 21.5 percent to 22.8 percent in the fourth quarter.
On top of that, the institute also said that almost half — a staggering 48 per cent — of those aged under 25 were jobless.
There are now a rounded 1.6 million households in Spain without anyone employed in them.
Spain already has the highest unemployment rate in the 17-nation eurozone, where the average unemployment rate is a little above 10 percent. Spain’s nearest competitor in the jobless stakes is Ireland, with 14.6 percent unemployment.
The fourth largest economy among those countries that use the euro as their currency — and Europe’s top job creator up until 2008 — Spain hit a crippling two-year recession in that same year, triggered by the international financial crisis and the bursting of a real estate bubble that had fueled its economy for nearly a decade.
The economy began to emerge from the recession at the end of 2010 but is now expected to slide back into a new one this quarter.
“It’s a negative report and one that will make the government work with greater intensity,” said Deputy Prime Minister Soraya Saenz de Santamaria. She pointed out that European Union statistics had already indicated this would be the figure.
She said the news “will lead the government to accelerate the rhythm of reforms” adding that in a matter of weeks her new conservative Popular Party government will present overhauls of labor laws and the banking system.
Ms Saenz de Santamaria said the government was already introducing new measures and cited Friday’s approval of a budget-discipline law that will allow the government to impose penalties on its debt-laden regional governments if they run deficits after 2020.
Finance Minister Cristobal Montoro said that regions will be given until 2020 to bring their spending under control. If they deviate then they face possible fines of 0.2 percent of their gross domestic product.
Montoro said that the bill was in line with EU demands and aimed to show Brussels and investors that Spain was serious about getting its economy back in shape.
Spain’s deficit for 2011 is expected to be 8 percent of national income, 2 points above the former Socialist government’s predictions. Prime Minister Mariano Rajoy acknowledged that regional government deficits, most of which are run by his own party, were responsible for 75 percent of the deviation.
The government is still committed to reducing the deficit to 4.4 percent in 2012 and down to the EU limit of 3 percent the following year, although with a recession looming, this pledge may prove very difficult to maintain.
In one of its first moves since taking office Dec. 23, the government approved a batch of austerity measures which aim to rein in the country’s swollen deficit with euro8.9 billion ($11.5 billion) in spending cuts and boost coffers with euro6.2 billion in tax increases.