Spain's jobless rate hits 15-year high in December

3rd January 2012, Comments 0 comments

Spain's jobless numbers rose for the fifth straight month in December to a new 15-year high, official data showed Tuesday, posing a stiff challenge to the country's new conservative government.

The number of registered unemployed rose from the previous month by 1,897 people, or 0.04 percent, to 4.42 million, its highest level since the labour minister started collecting the figures in 1996.

The number of jobless was up in December from the same year-ago period by 322,286 people, or 7.86 percent.

"The figures for the number of registered unemployed for the month of December confirm the deterioration of the economic situation during the second half of the year," the labour ministry said in a statement.

Spain, once the motor of job creation in the eurozone, has struggled to find jobs for the millions thrown out of work by the collapse of a labour-intensive property bubble in 2008.

The Bank of Spain warned last week that the economy shrank in the fourth quarter of 2011 as tourism and exports, the drivers of a modest recovery, weakened.

The grim report fueled fears that Spain, the eurozone's fourth-largest economy, was heading back into recession after the economy posted zero growth in the third quarter of 2011.

The new government of Prime Minister Mariano Rajoy has vowed to make make fighting unemployment and fixing the country's finances its top priorities.

It plans to present a major labour market reform this month which will change hiring laws and the collective bargaining system to try to encourage the hiring of workers.

The secretary of state for employment, Engracia Hidalgo, said the successive labour reforms carried out by the previous Socialist government "never made the labour market more dynamic and flexible".

Spain's welfare system only allows workers to receive unemployment benefits for a maximum of two years.

But Prime Minister Mariano Rajoy's government on Friday extended a monthly payment of 400 euros ($520) for people whose benefits have run out. The payments had been due to expire in February.

Rajoy was sworn in as prime minister on December 22 a month after his Popular Party won a general election in a landslide, putting an end to nearly eight years of Socialist rule.

The National Statistics Institute, which uses a different method of calculation to the labour ministry, says the number of unemployed rose to 4.978 million people in the third quarter from 4.834 million in the previous three months.

According to those figures, the Spanish unemployment rate soared to a 15-year high of 21.52 percent in the third quarter, the highest among major industrialised nations.

The rise in the number of jobless in Spain is in sharp contrast with the situation in Germany, Europe's largest economy, where unemployment dropped to its lowest level in 20 years last year.

The jobless total in Germany fell by 263,000 to 2.976 million in nominal or unadjusted terms, equivalent to 0.6-percent decline in the jobless rate to an annual average of 7.1 percent, the country's Federal Labour Agency said Tuesday.

© 2012 AFP

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