Spanish Unemployment Rises to 20.3% as Austerity Slows Recovery
Spain’s jobless rate, the highest in Europe, increased to 20.3 percent in the fourth quarter as the deepest austerity measures in three decades delayed the recovery from a recession.
The unemployment rate rose from 19.8 percent in the third quarter, the National Statistics Institute said today. That compares with a median forecast of 20.2 percent in a Bloomberg News survey of eight economists.
Spain’s Socialist government is fighting to create jobs and restore economic growth even as it implements austerity measures to rein in the euro region’s third-largest budget deficit. The surge in unemployment has eroded support for Prime Minister Jose Luis Rodriguez Zapatero, who faces regional and local elections in May.
Spain’s government in September revised its forecast for 2010 unemployment on average to 19.8 percent from a previous estimate of 19.4 percent.
The worst economic crisis in six decades and the destruction of jobs have quickened the pace at which the social- security system eat into its surplus. The Cabinet plans to pass a pension bill today as part of efforts to restore investor confidence.
The measures, which include changes to labor legislation and a freeze on public wages, have alienated voters and traditional allies in the unions. The Socialists would win 18 percent of the vote if general elections were held now, with the opposition People’s Party grabbing 49 percent, according to a poll in El Mundo on Jan. 2. Zapatero will announce this fall that he won’t seek stand in general elections in March 2012, La Vanguardia newspaper reported yesterday.
To contact the reporter on this story: Emma Ross-Thomas in Madrid at erossthomas@bloomberg.net
To contact the editor responsible for this story: Craig Stirling at cstirling1@bloomberg.net
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