Jobless hits 12-year high as recession deepens and unemployment may rise to 18 per cent
SPAIN has gone into its worst recession for 50 years, estimate analysts.
The news came as Spain’s unemployment totals leapt more than expected in December to reach three million for the first time in 12 years.
According to official figures, unemployment now stands at 3.13 million – and that is expected to rise considerably in 2009.
“This is different to anything we have experienced before,” finance minister Pedro Solbes admitted.
His comments came as the country became the second country in five days to be downgraded by credit rating company Standard & Poor. Spain lost its AAA sovereign rating removed as its budget deficit swelled.
Solbes predicted that the economy will shrink by 1.6 per cent in 2009. The budget deficit will come close to 6 per cent. “We have used up the margin we had in public spending,” he said.
He is also predicting that by the end of 2009 some 16 per cent will be unemployed. Some banks are predicting 18 per cent.
The figures confirm that Spain has, according to the Guardian “the most troubled economy in Europe”.
It shed a million jobs last year, a feat not managed by any other European country since the 1930s, with another million jobs expected to go this year.
Spain already has as many unemployed workers as Germany, a country with almost double its population. Spain’s savings banks predict unemployment of 18 per cent.
“That is the stuff of social revolution,” commented one senior trade unionist.
“The real problems will come in the second half of this year,” said Victor Renes of the charity Caritas – when the first wave of jobless will be reduced to minimal aid from one of western Europe’s less generous welfare systems. Caritas has already seen demand for help leap 75 per cent in 2008.
According to statistics, in December, almost 140,000 people lost their job – the ninth straight month of increasing unemployment.
In Andalucía, a total of 208,561 people lost work in 2008. The total number of unemployed in the region now stands at 720,000.