Spanish Unemployment Rate Hits 27.2%
04-25-2013, 05:44 AM
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Spanish Unemployment Rate Hits 27.2%
MADRID—Unemployment in Spain rose to an all-time high of 27.2% of the workforce in the first quarter, a sign that government efforts to stem the rate of job destruction amid a deepening recession have yet to make a significant impact.
The figures once again highlight the cost of the euro zone's pursuit of austerity in an effort to repair public finances damaged by the financial crisis and the economic slowdown that followed. It comes a day before Spain's government will release fresh three-year economic forecasts, in a report that will focus on shifting priorities to growth and away from reducing its budget deficit, which stood at 7.1% of gross domestic product last year.
Data from the National Statistics Institute, or INE, Thursday showed over 322,000 jobs were lost in the first three months of 2012, slightly below the pace of job destruction in the previous quarter but still a large number for a country of 47 million. The jobless rate was pushed up from 26.0% in the fourth quarter.
Spain, with the second-highest unemployment rate in the euro zone behind Greece, is suffering from the collapse of a decadelong housing boom, which in late 2011 helped to push the country into its second recession in three years.
Over the last two years, Spain's government has responded to the recession with spending cuts similar to those undertaken across Europe in the recent financial crisis. This included large job cuts in the public sector, especially in recent months. Private-sector companies facing tight financing conditions and uncertainty about their economic future have also been forced to scale back.
The effectiveness of austerity in mending an economy has been challenged in recent weeks, as European economies continue to slow and unemployment continues to rise. Over the weekend, Finance Minister Luis de Guindos said there won't be any new significant austerity measures in the plans to be unveiled Friday.
Earlier this week, European Commission President José Manuel Barroso said austerity policies had reached a limit and more pro-growth measures must be taken, and Portuguese Economy Minister Alvaro Santos Pereira presented an ambitious stimulus program aimed at growth.
Last week, the International Monetary Fund joined the U.S. in saying the euro zone should ease back on austerity, arguing the belt-tightening is holding back the global economic recovery and could end up being self-defeating.
Speaking Thursday, the IMF's first deputy managing director said that while efforts to repair public finances are still needed, more attention needs to be given to policies that stimulate growth and create jobs.
"We…need to talk about how to make fiscal policy more growth-friendly, in essence about the composition of spending and revenues for any given deficit," David Lipton said. "As we see it, countries that can afford to support the economy need to do so—but in ways that encourage the private sector to invest and boost demand."
Also speaking Thursday, European Commission Vice President Olli Rehn said fiscal belt-tightening is still necessary in the European Union, but there is now leeway to slow the pace of budget cuts.
"The pace of fiscal consolidation is slowing down in Europe," Mr. Rehn said, adding that there was now "room to make fiscal policy with a more medium-term view."
However, the euro zone's austerity drive was defended by Joerg Asmussen, a member of the European Central Bank's executive board, who said it is the only way for countries to secure long-term stability.
"Delaying fiscal consolidation is no free lunch," Mr. Asmussen said, speaking at a conference in London.
The jump in Spain's unemployment rate followed sharp rises in the Netherlands and Sweden during March, an indication that the European Union's northern members are also suffering from the bloc's economic weakness.
The U.S. economy added 88,000 jobs in March, in what was taken as a grim reading for the world's largest economy.
Data released Tuesday by the Bank of Spain showed the euro zone's fourth-largest economy had shrunk by 2% in the first three months of 2013, compared with the year-earlier period. The latest decline was slightly deeper than the one registered for the final three months of last year. Mr. de Guindos has said the economy will contract by 1% to 1.5% this year, and register a modest expansion next year.
—David Román and Geoffrey T. Smith contributed to this article. Write to Art Patnaude at [email protected] and Matina Stevis at
The figures once again highlight the cost of the euro zone's pursuit of austerity in an effort to repair public finances damaged by the financial crisis and the economic slowdown that followed. It comes a day before Spain's government will release fresh three-year economic forecasts, in a report that will focus on shifting priorities to growth and away from reducing its budget deficit, which stood at 7.1% of gross domestic product last year.
Data from the National Statistics Institute, or INE, Thursday showed over 322,000 jobs were lost in the first three months of 2012, slightly below the pace of job destruction in the previous quarter but still a large number for a country of 47 million. The jobless rate was pushed up from 26.0% in the fourth quarter.
Spain, with the second-highest unemployment rate in the euro zone behind Greece, is suffering from the collapse of a decadelong housing boom, which in late 2011 helped to push the country into its second recession in three years.
Over the last two years, Spain's government has responded to the recession with spending cuts similar to those undertaken across Europe in the recent financial crisis. This included large job cuts in the public sector, especially in recent months. Private-sector companies facing tight financing conditions and uncertainty about their economic future have also been forced to scale back.
The effectiveness of austerity in mending an economy has been challenged in recent weeks, as European economies continue to slow and unemployment continues to rise. Over the weekend, Finance Minister Luis de Guindos said there won't be any new significant austerity measures in the plans to be unveiled Friday.
Earlier this week, European Commission President José Manuel Barroso said austerity policies had reached a limit and more pro-growth measures must be taken, and Portuguese Economy Minister Alvaro Santos Pereira presented an ambitious stimulus program aimed at growth.
Last week, the International Monetary Fund joined the U.S. in saying the euro zone should ease back on austerity, arguing the belt-tightening is holding back the global economic recovery and could end up being self-defeating.
Speaking Thursday, the IMF's first deputy managing director said that while efforts to repair public finances are still needed, more attention needs to be given to policies that stimulate growth and create jobs.
"We…need to talk about how to make fiscal policy more growth-friendly, in essence about the composition of spending and revenues for any given deficit," David Lipton said. "As we see it, countries that can afford to support the economy need to do so—but in ways that encourage the private sector to invest and boost demand."
Also speaking Thursday, European Commission Vice President Olli Rehn said fiscal belt-tightening is still necessary in the European Union, but there is now leeway to slow the pace of budget cuts.
"The pace of fiscal consolidation is slowing down in Europe," Mr. Rehn said, adding that there was now "room to make fiscal policy with a more medium-term view."
However, the euro zone's austerity drive was defended by Joerg Asmussen, a member of the European Central Bank's executive board, who said it is the only way for countries to secure long-term stability.
"Delaying fiscal consolidation is no free lunch," Mr. Asmussen said, speaking at a conference in London.
The jump in Spain's unemployment rate followed sharp rises in the Netherlands and Sweden during March, an indication that the European Union's northern members are also suffering from the bloc's economic weakness.
The U.S. economy added 88,000 jobs in March, in what was taken as a grim reading for the world's largest economy.
Data released Tuesday by the Bank of Spain showed the euro zone's fourth-largest economy had shrunk by 2% in the first three months of 2013, compared with the year-earlier period. The latest decline was slightly deeper than the one registered for the final three months of last year. Mr. de Guindos has said the economy will contract by 1% to 1.5% this year, and register a modest expansion next year.
—David Román and Geoffrey T. Smith contributed to this article. Write to Art Patnaude at [email protected] and Matina Stevis at
04-25-2013, 06:01 AM
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No mention of why Spain had to do an austerity program? Here is an inconvenient truth they spent about 600,000 Euros on each green energy job from 2000 to 2010. Imagine Solyndra times a 1,000.
http://www.juandemariana.org/pdf/090...-renewable.pdf
http://www.juandemariana.org/pdf/090...-renewable.pdf
04-25-2013, 06:14 AM
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No mention of why Spain had to do an austerity program? Here is an inconvenient truth they spent about 600,000 Euros on each green energy job from 2000 to 2010. Imagine Solyndra times a 1,000.
http://www.juandemariana.org/pdf/090...-renewable.pdf
http://www.juandemariana.org/pdf/090...-renewable.pdf
Wow!
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