By: Mike Campbell
Figures released by the Spanish national statistics agency (INE) reveal that the unemployment rate in Spain has hit 20%. This is the highest level seen in thirteen years in Spain and the worst figures of any Eurozone country since the creation of the single currency. Over 4.6 million people are without work in Spain. These people are obviously not contributing to the Spanish exchequer through income tax and are receiving social security payments. This is only making the Spanish debt problems worse. The Spanish economy shrank by 3.6% in 2009.
Although Eurostat uses different mechanism to calculate unemployment than INE, it has just released data that shows Eurozone unemployment as a whole is stable at 10% with 15.8 million people out of work. This means that more than 25% of Eurozone unemployment is centred in Spain. The wider unemployment level within the EU is slightly lower at 9.6% which means that 23.1 million people are without work within the European Union. The only nation that posted improved unemployment statistics was Germany where the rate fell by 0.1% to 7.3%. Perhaps it is a crumb of comfort that Europe’s largest economy is hiring more people. The unemployment statistics reveal just how important it is that economic confidence is not lost and that a credible and rapid solution is found for the Greek financial crisis which is dragging down the markets and the Euro. The Spanish economy is at least five times larger than that of Greece.
Eurostat also revealed that inflation is rising within the Eurozone region. It has increased by 0.1% in April to stand at 1.5%. A higher inflation rate can be a sign of improving economic activity.