Spain passes new measures to curb unemployment

11th February 2011, Comments 0 comments

Spain's government Friday approved new measures to curb its unemployment rate, which has soared to the highest in the industrialised world last year.

The "shock plan" for employment includes financial help to companies to hire people under 30 and for the long-term unemployed, according to a statement released after a cabinet meeting.

The government will pay 400 euros ($540) a month for six months to unemployed people who have lost their rights to other benefits. The measure replaces a similar one approved in mid-2009 when the country was in the middle of a deep recession.

Official data last month showed that Spain's unemployment rate had surged to 20.33 percent at the end of 2010, the highest in the industrialised world and easily exceeding the government target of 19.4 percent for the year.

The Spanish economy, the European Union's fifth biggest, slumped into recession during the second half of 2008 as the global financial meltdown compounded the collapse of a labour-intensive construction boom.

It emerged with tepid growth of just 0.1 percent in the first quarter of 2010 and 0.2 percent in the second but then stalled with zero growth in the third.

In the fourth quarter, GDP edged up 0.2 percent, but the economy shrank 0.1 percent over the year, the National Statistics Institute (INE) said earlier Friday.

Prime Minister Jose Luis Rodriguez Zapatero's Socialist government anticipates only a moderate improvement this year, with 1.3-percent growth and a jobless rate still scaling dizzying heights at 19.3 percent.

Spain's major challenge has been to avert the debt quagmire that forced Greece and Ireland to accept European Union-IMF economic and financial rescues last year.

© 2011 AFP

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