Spanish unemployment nears 25%

Spanish unemployment is now near one quarter of the workforce, fuelling fears the country might need a costly bailout as the IMF issued its latest report on the eurozone's fourth biggest economy.

The unemployment rate rose in the second quarter to 24.63 percent of the workforce and to a huge 53 percent among the young, despite the start of the tourist season, figures from the national statistic office showed on Friday.

The increase in the overall jobless numbers was smaller than in the first quarter however, with the number of eligible people out of work rising to nearly 5.7 million people.

Between April and June, 53,500 people lost their jobs in Spain, compared with 365,900 in the first quarter, the national statistics office said.

The unemployment rate rose from 24.4 percent in the first quarter -- already the highest in the industrial world -- as Spain entered its third straight quarter of economic contraction.

And the International Monetary Fund warned Friday that the Spanish recession would be worse than initially expected, with a forecast contraction of 1.7 percent this year and of 1.2 percent in 2013.

Official Spanish economic growth figures for the second quarter are expected on Monday.

Spain's economy is reeling in the aftermath of a decade long real estate boom that crashed with the debt crisis, bringing the Spanish financial sector to the brink of insolvency.

Under pressure from European authorities who have agreed to bail out Spanish banks, Spain's conservative government has approved tens of billions of euros' worth of spending cuts, tax hikes and other measures.

Madrid must still pay high interest rates to borrow money on public debt markets, though the rate, or yield on benchmark 10-year bonds fell on Thursday and Friday following comments by European Central Bank chief Mario Draghi.

He declared on Thursday that the ECB was "ready to do whatever it takes to preserve the euro.

"And believe me it will be enough," Draghi added in comments that pushed yields on Italian and Spanish bonds lower because investors now expect the bank to buy debt issued by those countries, possibly in cooperation with their eurozone partners.

The stock exchange in Madrid has also leapt higher in the past two days, gaining 6.0 percent on Thursday and another 3.91 percent on Friday.

But the IMF, which wrote its report before Draghi's remarks had been made, said that heightened market tension could disrupt Spain's ability to finance itself despite a eurozone bailout worth up to 100 billion euros ($123 billion) agreed for Spanish banks and emergency financial reforms for the 17-nation bloc.

"Market tensions could intensify further, threatening market access, particularly if policies fail to stem capital outflows or due to further stress elsewhere in the euro area," the IMF said in a report.

Spanish Prime Minister Mariano Rajoy has scrambled to regain market confidence and unveiled his latest set of measures on July 11 aimed at saving 65 billion euros over three years.

Rajoy says the steps will help cut the public deficit in line with targets agreed with the European Union, and strengthen the economy in the long term.

Critics say the measures will make the poor suffer unfairly from moves such as a public sector bonus cut and a rise in sales tax that together will hit consumption.

"All the spending cut policies they are taking are restrictive and run counter to growth," said Alberto Roldan, an analyst at Spanish brokerage Inverseguros.

"Raising the fiscal pressure in a country with 25 percent unemployment is absolutely regressive."

Hundreds of thousands of Spaniards have marched across the country in recent weeks to protest against the measures.

The Spanish region hardest hit by rising unemployment was Catalonia in the northeast with a rate of 33.92 percent, Friday's figures showed. The lowest rate was 14.56 percent in the affluent Basque Country.

Concern that Spain might need a full bailout has grown since Spanish regions including Catalonia, the second biggest, said they too might need help from the federal government.

On Friday however, the government dismissed the prospect of an international rescue.

"A bailout is not an option," government spokeswoman Soraya Saenz de Santamaria said.

Loading...

Editor’s note:Yahoo Philippines encourages responsible comments that add dimension to the discussion. No bashing or hate speech, please. You can express your opinion without slamming others or making derogatory remarks.

  • ToyotaPH continues it’s strong sales in February
    ToyotaPH continues it’s strong sales in February

    Toyota Motor Philippines (TMP) sustains its strong sales in its February performance. Toyota’s strong performance last month was due to the  high demand of the Vios, with sales of 2,012 units and of course the rest of Toyota’s line up such as the Fortuner, Innova, Wigo, Hilux, Avanza and Corolla Altis. Toyota’s luxury brand, Lexus, recorded 60 units last month. …

  • No apology, but Noy seeks understanding
    No apology, but Noy seeks understanding

    There was no apology, but President Aquino yesterday expressed regret, took “full responsibility” and appealed to the nation for “deepest understanding” for the Jan. 25 Mamasapano raid in which dozens died, including 44 police Special Action Force (SAF) commandos. “To every Filipino who has felt failure or has been hurt because of the events related to this operation, it is with abiding humility that I ask for your deepest understanding,” Aquino said in a speech before the 246 new graduates of …

  • MVP on endorsement: Thanks, I’m no politician
    MVP on endorsement: Thanks, I’m no politician

    Businessman Manuel V. Pangilinan is grateful for Sen. Miriam Defensor-Santiago’s praise and presidential endorsement, but says he is not a politician. In an interview on the sidelines of the launch of the search for The Outstanding Young Men (TOYM) of the Philippines 2015 Wednesday night, Pangilinan dismissed the idea of running for president in the 2016 elections. “I’m not a politician, I’m just an ordinary business person,” he added. Santiago endorsed Pangilinan as a presidential candidate …

  • No Lenten break in operations vs lawless groups – AFP
    No Lenten break in operations vs lawless groups – AFP

    The Armed Forces of the Philippines (AFP) is not suspending its offensive against the Abu Sayyaf, New People’s Army (NPA) and other lawless groups during the Holy Week, an official said yesterday. Lt. Col. Harold Cabunoc, AFP public affairs office chief, said the AFP leadership is leaving it up to area and division commanders whether to raise the alert status in preparation for the Holy Week. Those deployed in areas where there are ongoing law enforcement operations against terrorist groups …

  • Probe harassment vs human rights lawyer, CA orders AFP
    Probe harassment vs human rights lawyer, CA orders AFP

    The Court of Appeals (CA) has ordered the Armed Forces of the Philippines (AFP) to investigate a human rights lawyer’s claim of harassment, including surveillance, by several military officers. In a 22-page decision, the former Special Sixth Division of the appellate court granted the petition for writ of amparo and habeas data of Maria Catherine Dannug-Salucon. The CA ordered the AFP to identify the officers behind the surveillance and file charges against them. The CA ruling said …

  • Noy vows to dismantle bata-bata system in PNP
    Noy vows to dismantle bata-bata system in PNP

    President Aquino vowed yesterday to dismantle the culture of factionalism or the bata-bata system within the Philippine National Police as he continued the search for the next PNP chief. Speaking at the Philippine National Police Academy (PNPA) commencement exercises here, the President said the country needed solidarity among leaders and members of the police force so that the policemen would be effective protectors of Filipinos. “Our challenge to the next chief of our national police force: …

  • Envoy to expats: Retire, invest in Phl
    Envoy to expats: Retire, invest in Phl

    Retire and invest in real estate in the Philippines, especially now that the country has made it to the top 10 retirement destinations in the world. This is the message being spread by the Philippine embassy in Washington, with Ambassador Jose Cuisia Jr. leading the refrain in meetings with various Filipino-American communities in the US. In his talks, Cuisia said that an affordable cost of living as well as warm climate and people are just some of the things that make the Philippines a top …

  • PNPA spotlight falls on Ampatuan grandson
    PNPA spotlight falls on Ampatuan grandson

    The stigma of being a namesake of the principal suspect in the 2009 Maguindanao massacre did not prevent Cadet First Class Andal Ampatuan III from entering and graduating from the Philippine National Police Academy (PNPA). Ampatuan III, now with a rank of police inspector, is a grandson of former Maguindanao governor Andal Ampatuan Sr. The younger Ampatuan was among the 246 graduates of the PNPA “Lakandula” Class of 2015. Ampatuan III’s mother is Bai Rebecca Ampatuan, a daughter of the …

POLL

Should Aquino be held accountable over the Mamasapano operations?

Loading...
Poll Choice Options