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Spanish unemployment plague

April 3, 2012

Spain's number of jobless people has risen for the eighth consecutive month with companies across the nation laying off staff. Madrid's 2012 austerity budget may further worsen the situation in the short-term.

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People queue outside an unemployment office in Madrid
Image: dapd

The number of job seekers in Spain jumped to an all-time high in March, the National Statistics Institute announced on Tuesday. Unemployment rose for the eighth straight month to reach 4.75 million people.

That meant a 0.82-percent increase from February of this year and a 9.63-percent rise year-on-year.

"We continue to face an unsatisfactory situation of an increase in the number of jobless people," Secretary of State for Employment, Engracia Hidalgo, said in an official release.

He added it is important to create confidence and flexibility for companies. In February, the Spanish government of Prime Minister Mariano Rajoy passed a new labor reform which made it easier and cheaper for firms to hire and fire people as well as cut wages unilaterally.

Spending spree over

Last Friday, Madrid unveiled its altered 2012 budget, which included 27 billion euros ($36 billion) in spending cuts and tax hikes. It is the most stringent austerity budget since the country returned to democracy in 1975 after the death of dictator Francisco Franco.

The 2012 budget freezes public-sector wages, raises taxes on tobacco and closes loopholes for large companies.

The government conceded that the measures aimed at budget consolidation may push up unemployment even further in the short-term. Madrid expects the jobless rate to reach 24.3 percent in the course of this year. Spain already has the worst unemployment of any country in the industrialized world.

hg/srs (Reuters, AFP)