Spanish unemployment has hit a record high, with more than one in five workers jobless in the first quarter of the year. The official figure of 20.05 per cent is the highest rate in the eurozone. It is another blow for the government, trying to clamber out of Spain’s deepest recession for decades.
At one job centre, a claimant said: “What I’m doing now is working in whatever comes up. I have a little girl and i have to do it. I can’t just not do anything.”
Another added: “We are immigrants. We receive unemployment benefits. If it keeps on like this, we’re going to be forced to leave.”
Spain’s credit rating cut earlier this week was based partly on the belief that the government was underestimating its fiscal problems and had too rosy a picture of future growth. Added to that, public spending is on the rise with extended benefits for the long-term unemployed.
Estefania Ponte Garcia from BNP Paribas Spain:
“We are seeing very high jobless figures, around the 20 – some quarters at 21 percent -, but what we think will have the biggest impact is the issue of job destruction. Slower (than before) but there will still be job destruction. And this will hit private consumption hard.”
The jobless rate for the first three months of the year was well up on the figure for the end of last year, and unlike the government, which believes unemployment is peaking, some analysts believe it could hit 21 per cent in 2010.