The unemployment rate in Spain is continuing to get worse and has shot up to a staggering 26%. This means that there are nearly six million people out of work, and unfortunately there seems to be little prospect for improvement in 2013.
Europe has been hit hard by recession, with other Euro zone countries facing crisis too such as Greece and Italy, where debts are massive and unemployment high. The UK itself which does not use the Euro as currency has still been affected by the EU recession and its own problems including debt due to previous over spending, and unemployment.
Unemployment seems to be being made worse though in many EU countries by the insistence of governments to press on with austerity measures i.e. cuts to public expenditure such as reduced public services and reduced public investment.
The problem is most acute in Spain though where the unemployment rate rose to 26% in the fourth quarter of 2013 which equates to 5.97 million people according to the National Statistics Institute. This is more than double the European Union average.
Things are set to continue to get worse though:
“We haven’t seen the bottom yet, and employment will continue falling in the first quarter,” said Citigroup strategist Jose Luis Martinez
Spain had already faced a recession in 2009 and sank into a second at the end of 2011 after a burst housing bubble left millions of low skilled labourers out of work. In addition negative private and business outlook destroyed consumer spending and imports.
Prime Minister Mariano Rajoy’s government efforts to control one of the Euro zone’s biggest deficits through billions of euros of spending cuts and tax rises has added to the general negative feelings within the country, further reducing demand.
The number of unemployed people in Spain has risen since Rajoy took office in late 2011 from 5.27 million so clearly what his government has been trying so far hasn’t worked. During 2012 there was an average of 1,900 people being put out of work every day. There is not expected to be any net job creation this year.
Young people in Spain are one of the groups that have been hit the hardest with 60% of people under the age of 25 unemployed in the final quarter of 2012.
To put Spanish unemployment into perspective if the United States had a 26% unemployment rate this would mean 40 million people unemployed or in other words the entire population of California!
What do you think can be done about this crisis? Should the government try to invest more than continue to cut back on spending?
Source [MSN News]