Spain tackles youth unemployment

Spain would earmark 3.5 billion euros ($4.5 billion) over four years to stem the rising tide of unemployment among young people in the debt-laden eurozone country, the government announced Tuesday.

As Spain's youth unemployment rate has soared to 55 percent, Prime Minister Mariano Rajoy unveiled a catalogue of 100 individual measures.

Speaking to an audience of union, company and government representatives in Madrid, Prime Minister Rajoy announced tax breaks for young freelance workers and for companies which hire workers in their twenties.

Among the steps were also lower social security payments for young self-employed workers and state-funded payment of unemployment benefits for start-up entrepreneurs. Moreover, Rajoy promised that young people finishing their training would be offered a contract within four months.

Labor unions said the measures would only have limited effects as long as the government maintained its course of sweeping austerity. Madrid has slashed the national budget by billions of euros to rein in a huge deficit, which was primarily caused by bailing out the country's ailing banking sector.

However, Rajoy said the spending measures in support of the young wouldn't undermine his determination to cut Spain's deficit further.

Madrid's budget shortfall came in at 6.7 percent of gross domestic product (GDP) in 2012, slightly higher than agreed with the European Union executive Commission, but still far off the 3-percent mark basically allowed under EU treaties.

uhe/kms (Reuters, dpa)