Crisis leaves one quarter of Spaniards jobless

The number of people unemployed reached 5,639,500 at the end of March, the highest in 18 years, Spain’s national statistics said. The announcement came just hours after ratings agency Standard & Poor’s downgraded the country’s debt, fuelling fears that the country will become the latest in the eurozone to require a bailout.

“The figures are terrible for everyone and terrible for the government,” foreign minister Jose Manuel Garcia-Margallo said. “Spain is in a crisis of huge proportions.”

The country’s unemployment rate now stands at 24.4 per cent, the highest in the eurozone. Among 18 to 25 age group, work is even scarcer: with around half not in education and without work.

Spain is in recession for the second time in three years as the damage from a housing bust persists. Foreclosures are rising, Spain’s banks are in worse financial shape and the government’s deficit is at worrisome levels.

“The situation is very bad. There’s no work,” said Enrique Sebastian, a 48-year-old unemployed surgery room assistant as he left one of Madrid’s unemployment offices yesterday.

“The only future I see is one with wages of (euro) 400 a month for eight-hour days. And that’s if you can find it,” said Mr Sebastian.

Last month, president Mariano Rajoy introduced an “extraordinary” budget designed to raise €27bn through a mix of swingeing cuts and tax increases. It is estimated that Spain’s deficit will be 5.8 per cent of total economic output in 2012, higher than the target of 4.4 per cent agreed with the European Union.

The government released a flurry of upbeat data on how it plans to turn the economy round between 2012 and 2015. Despite the dismal job numbers, it predicts a roughly balanced budget in 2016.

However, there was more pain, too. Economy minister Luis de Guindos announced an increase in indirect taxes next year. He said this measure will raise €8 billion in new revenue to help chip away at a bloated deficit.

Of the country’s regions, Andalusia has been hardest hit by the downturn that followed the popping of the decade-long construction boom. Official unemployment now stands at more than 30 per cent.

Julio Alvarez is typical of many in its regional capital, Seville. The 34-year-old studied music at university before gaining a scholarship to study in Colombia. On returning to Spain he completed another degree. After graduating he got a job – stacking shelves in a local supermarket. “It was the only thing I could get”, he says.

Diego Beas, a Spanish policy analyst based in Washington, describes youth unemployment as “the biggest problem facing the next generation.

“Spain’s is a very structural unemployment that isn’t going to just go away with an upturn in the world economy.”

Mr Rajoy’s People’s Party government, elected in a landslide in November, had announced tough labour market reforms that included reduction in severance pay and legislation making it easier to hire and fire employees.

“[The new measures] will make things even worse,” said Francisco Jurado Gilabert, a 29-year-old PhD candidate at the University of Seville.

“We are fighting with each other for internships earning €400 or €500 a month. It’s impossible to think of the future, of having your own house with a wife and children. It’s very difficult to think in a stable way about the future,” he said.

If Mr Rajoy’s government is unable quickly to provide jobs and opportunities for the next generation he could feel the wrath of this new, still inchoate political voice. “Unemployment needs to come down significantly within the next year,” said Mr Beas.

As opposition to austerity mounts, and unemployment rises, many are planning a repeat of last year’s mass protests. “May 15 will be a global action day,” said Aitor Tinoco I Girona, a leading figure in the M15 movement in Barcelona. “In this neighbourhood, you see cases of where the father has lost his job, his children have no work. This cannot go on.”