Spain: Unemployment could soar to one-in-four next year

[Hannah Bell]

In a series of recent gloomy economic forecasts by the European Commission, the European Central Bank, the Spanish Central Bank and government institutions, the Spanish unemployment rate could soar to a staggering 20 percent and possibly to one in four workers in 2010.

“The momentum is clearly there for something well above 20 percent, it’s odds on really. My own forecast is that it gets to something around about 23 percent,” said senior European economist Dominic Bryant of BNP Paribas.

In the past year alone, two million people have lost their jobs, taking the total unemployed to just over four million. The Spanish unemployment rate currently stands at over 17 percent. That is double the European Union average. The recent member states of Eastern Europe trail not far behind. The average across the 27 EU countries now stands at over 8 percent, though the real figure is undoubtedly much higher.

More than 800,000 people joined the dole queues in the major cities of Madrid, Barcelona and Cádiz in the first quarter of this year, the biggest such increase since the country’s National Statistics Institute started recording unemployment figures in 1976.

Spain’s period of moderate growth over the last 14 years was in many ways reminiscent of the Eastern European states. In both cases it was dubbed by many an “economic miracle.” These economies have been thrown into reverse gear with the global contraction of finance capital that started last year.

Spain was especially vulnerable to the current global crisis because it was based above all on the growth of a colossal housing and construction bubble and a fledgling speculative finance industry, with a smaller manufacturing sector (especially cars) geared to attracting foreign capital to relatively low-wage labour.

All of these processes that drove the growth in the Spanish economy are in the process of disintegration. The collapse of the building and housing construction industry accounts for the largest slice of the current jobless rate with the Spanish housing market falling for 12 consecutive months. Building quickly came to a standstill at the end of last year after the banks stopped lending. Now the problem is compounded by companies defaulting on their payments to the banks.

In the face of the collapse, the IMF has issued an ominous warning to the Spanish working class. They must “improve productivity and lower costs.” In other words, the burden of the crisis is to be foisted on to the backs of workers by further attacks on wages and public spending.

http://www.wsws.org/articles/2009/may2009/span-m26.shtml

[Christa]

1. I am afraid we will follow suit

where will it end?

:scared:

[dipsydoodle]

2. As that article points out so accurately

The collapse of the building and housing construction industry accounts for the largest slice of the current jobless rate with the Spanish housing market falling for 12 consecutive months. Building quickly came to a standstill at the end of last year after the banks stopped lending. Now the problem is compounded by companies defaulting on their payments to the banks.

[blindpig]

3. 20.2% in Union Co, SC.

http://www.youtube.com/watch?v=ZbWRfBZY-ng