Spain unemployment hits record levels

Latest data shows that unemployment rate rose by 1.5 per cent in November, hitting 4.9 million.

Thousands of people have turned up for recent strikes against unemployment and government budget cuts [AFP]

Spain’s number of unemployed people has almost hit the five million mark, as the country’s recession shows few signs of slowing down and its banks await crucial bailout cash.

On Tuesday, Spain’s labour ministry said that unemployment rose by 74,296, or 1.5 per cent, in November to a record level of 4.9 million.

The country’s unemployment rate is released separately and quarterly. It stood at 25 per cent at the end of the third quarter, with the youth unemployment rate standing well above 50 per cent.

The new figures have been released a day after finance ministers from Spain’s euro partners approved the release of a $51.6 billion (39.5 billion euro) bailout for the Spanish banks that were worst hit by the property market collapse in 2008.

The funds are part of a $130.8 million (100 million euro) rescue package for Spanish banks, agreed in June this year by the 16 other European Union countries that fall under the eurozone.

The loan package is meant to ease pressure on the Spanish government, so that it can concentrate on managing national finances and avoid a full-blown sovereign debt default.

The 39.5 billion euro figure includes 37 billion euro in loans for four banks already nationalised by the Spanish government. The money is to begin arriving next week.

Under the deal, Bankia will get 18 billion euros, Catalunya Caixa 9 billion euros, Novagalicia 5.5 billion euros and Valencia Bank 4.5 billion euros.

In return, the entities must reduce the size of their businesses by 60 per cent, branch numbers by 50 per cent, stop lending in the real estate sector and concentrate on retail and small-to-medium business loans.

“The implementation of the program is on track,” said Jean-Claude Juncker, the Luxembourg prime minister who heads the eurogroup of finance ministers.

Source: News Agencies