The number of people out of work in Spain has hit a record high as Europe struggles to contain its debt crisis.

New figures show that one-in-four Spanish workers are now without a job. Only Greece has a higher unemployment rate in the European Union (EU).

"For [every] one per cent increased unemployment, the increase in suicides is almost as high."

- Maria Nyman, the director of Mental Health Europe

But as austerity measures bite, there is growing concern that the cuts are taking a more worrying toll. Health groups say there has been a sharp rise in mental health problems at the same time that welfare services are being cut back.

And the Red Cross says a growing number of Europeans are now relying on food aid.

Al Jazeera's Jonah Hull visited a charity-run soup kitchen in a hard-hit suburb of Madrid where hunger is a very real symptom of Spain's economic crisis.

"Not long ago mainly poor immigrants sat down to lunch at these tables. Now an equal number of Spaniards does as well," he says.

"Spain so far has only done limited austerity .... So to say that the rise in the unemployment rate has been down to austerity is a little excessive."

- Madhur Jha, a global economist at HSBC bank

"Spain's new poor have grown so much and so rapidly that the Red Cross now estimates that 2.3 million people are 'extremely vulnerable'. An annual appeal by the Spanish Red Cross, normally devoted to disaster victims far away, is for the first time focused on Spain itself."

Carlos Capataz, a Red Cross spokesman, says: "What Spain is living through now of course can't be compared to the aftermath of an earthquake or a flood. But it is also true that the Spanish Red Cross has never had to help so many people with such basic needs and over such a long period. This has forced us to make an appeal to Spanish citizens for support so that we can meet those needs."

So, with rates of depression and suicide on the rise, what is the social impact and the human cost of austerity?

To discuss this, Inside Story, with presenter Sami Zeidan, is joined by guests: Diego Lopez, the manager of corporate finance for multi-national consulting company KPMG and author of a blog on the economy called Global Islander; Madhur Jha, a global economist at HSBC bank who specialises in Spain's economy and labour market; and Maria Nyman, the director of Mental Health Europe who specialises in EU law and human rights.

"The Spanish people feel that they don't have a future right now in the country .... There are demonstrations every week, the people are very discontented, there is a huge outflow of people emigrating to other countries, there is a brain drain, and even the immigrants who used to comprise the workforce in Spain are returning to their home countries."

Diego Lopez, the manager of corporate finance for KPMG


  • Spanish unemployment has reached a record 25 per cent. That is 5.8 million people out of work
  • Spain's unemployment rate is at its highest since 1976
  • Before the financial crisis began, Greece had the lowest suicide rates in Europe. But the Greek health ministry says that the number of people taking their own lives rose by 40 per cent in the first half of 2011
  • According to Eurostat the average unemployment rate in the EU is 11.4 per cent
  • Spain's government is under pressure to seek financial help from lenders
  • Mariano Rajoy, the Spanish prime minister, is trying to cut the government's large budget deficit
  • Spain's budget deficit is around 9.4 per cent of its Gross Domestic Product
  • Rating agency Standard & Poor's ranks Spain just above 'junk'

Source: Al Jazeera