Spain unemployment tops 20 percent

Spain’s unemployment reaches milestone.

Unemployment in Spain has reached 20 percent, meaning 4.6 million people are out of work, the Spanish government announced Friday.

The figure, from the first quarter, is up from 19 percent and 4.3 million people in the previous quarter. It represents the second-highest unemployment rate in the European Union, after Latvia, according to figures Friday from Eurostat, the EU’s statistics service.

Spanish Prime Minister Jose Luis Rodriguez Zapatero told Parliament on Wednesday he believes the jobless rate has peaked and will now start to decline.

The first quarter of the year is traditionally poor for Spain because of a drop in labor-intensive activity like construction, agriculture and tourism.

This week, Standard & Poor’s downgraded Spain’s long-term credit rating and said the outlook is negative.

“We now believe that the Spanish economy’s shift away from credit-fuelled economic growth is likely to result in a more protracted period of sluggish activity than we previously assumed,” Standard & Poor’s credit analyst Marko Mrsnik said.

Gross domestic product growth in Spain is expected to average 0.7 percent annually through 2016, compared with previous expectations of 1 percent annually, he said.

Spain’s economic problems are closely tied to the housing bust there, according to The Economist magazine. Many of the newly unemployed worked in construction, it said.

The recession revealed how dependent public finances were on housing-related tax revenues, it said.

Another problem in Spain is that wages are set centrally and most jobs are protected, making it hard to shift skilled workers from one industry to another, the magazine said.

Average unemployment for the 27-member European Union stayed stable in March at 9.6 percent, Eurostat said Friday. That percentage represents 23 million people, it said.

The lowest national unemployment rates were in the Netherlands and Austria, which had 4.1 and 4.9 percent respectively, Eurostat said.

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3 thoughts on “Spain unemployment tops 20 percent

  1. I am really surprised that the unemployment rate in Spain surpassed 20 percent last week. That means Spain is now home to 4.6 million unemployed people. Before the crisis, the number was below two million. Odds of quickly finding a job again are poor. This means that even the most optimistic forecasts assume that unemployment will decrease by no more than a few points in the coming years. The root cause is the Spanish economy has become structurally less competitive since the country joined the euro and as consequence the prices and wages have risen starkly, but productivity has failed to keep up the pace. The government should starts with reforms to recover immediately!
    I my opinion the group of people in Spain who is hardest hit in the economic crisis and unemployment are young. This I can even confirm with data: 43 percent of all Spaniards below the age of 25 are unemployed. I think that in the time of the crisis the sentence: »world is standing on the young« is not correct anymore.
    I think that Spain should take as an example or as a model other states in eurozone with a lowest rate of unemployment (Austria, Netherland…) and try to learn from their reforms during the crisis. Spain should start quickly with reforms, especially has to stoped with increasing unemployment crise, that it will not going to become knew Greece!!!!

    Reply
  2. I would like to remind the situation in Spain before the crisis. In 2007, unemployment of Spain was at its lowest ever in history, reaching 7.9 per cent, slightly below the European average. Spain survived in this time a construction boom. But what does usually follow after big boom? Big recession. Spain enjoyed low interest rates and therefore cheap loans, this allowed developers to build new apartment blocks, houses and commercial buildings with a relatively low cost of borrowing. In this time Spain became a bubble waiting to burst. But…in 2008 the collapse of the property bubble left many workers out of work. Furthermore, this collapse was strongly supported also by global economic crisis, what leaded to such a bad current economic situation of Spain.

    Reply
  3. I would like to remind the situation in Spain before the crisis. In 2007, unemployment of Spain was at its lowest ever in history, reaching 7,9 percent, slightly below the European average. Spain survived in this time a construction boom. But what does usually follow after big boom? Big recession. Spain enjoyed low interest rates and therefore cheap loans, this allowed developers to build new apartment blocks, houses and commercial buildings with a relatively low cost of borrowing. In this time Spain became a bubble waiting to burst. But…in 2008 the collapse of the property bubble left many workers out of work. Furthermore, this collapse was strongly supported also by global economic crisis, what leaded to such a bad current economic situation of Spain.

    Reply

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