Spanish official unemployment drops in five-month first

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The number of people unemployed in Spain, which has the highest jobless rate in the European Union, fell for the first time for five months in December, the labour ministry said on Tuesday.

There were 4.1 million people registered as jobless last month, down 10,221 or 0.25 percent from November, the biggest decline for the month of December since 2000, it said in a statement.

Compared with the total 12 months ago, however, the figure was still up 4.50 percent, or 176,470.

Spain's secretary of state for employment, Mari Luz Rodriguez, said it was the "best behaviour for employment in the month of December in the last 10 years" but she stressed that "we can't be complacent because there are still over four million people without work".

The government does not provide a jobless rate, but the national statistics institute, which uses a different calculation method from the labour ministry, said on October 29 that the rate had dropped to 19.79 percent in the third quarter of 2010 from 20.09 percent in the second.

It was the first drop in the unemployment rate since it dipped to 7.95 percent in second quarter of 2007, its lowest level since the country returned to democracy following the death of dictator Francisco Franco in 1975.

Last month Prime Minister Jose Luis Rodriguez Zapatero's Socialist government announced it was scrapping a 426-euro (568-dollar) per month subsidy for the long-term unemployed as part of austerity measures to slash the public deficit and ease fears that it will need an EU bailout like Greece and Ireland.

The Spanish economy, the EU's fifth largest, 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.

Last week Zapatero said the fourth quarter will have positive growth but he added "we know it will be slow, weak growth."

The prime minister said 2010 had been "a difficult year" but said that 2011 "should be a year in which we go from recession to recovery."

The government forecasts a 0.3-percent drop in growth this year will be followed by an expansion of 1.3 percent in 2011.

Last year the government introduced a hotly contested labour market reform that cut the country's high cost of firing workers and gave companies more flexibility to reduce working hours and staff levels in economic downturns -- changes that he argued would boost job creation.

Last month European Central Bank President Jean-Claude Trichet said it was "extremely important to deepen the reform of the labour market" during a visit to Madrid.

In October the government raised its forecast for the jobless rate for 2011 to 19.3 percent from a previous estimate of 18.9 percent.

It predicts the jobless rate will dip to 17.5 percent in 2012 and 16.2 percent in 2013.

© 2011 AFP

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