Spain – Unemployment benefits Claims Up as Public Jobs Vanish

The number of people claiming unemployment benefits in Spain rose by 38,179 in August from the previous month to a total of 4,625,634.

Employment Ministry spokeswoman Engracia Hidalgo said although the monthly rise in unemployment was bad news, the increase was the smallest since August 2006.

Unemployment among young people under the age of 25 — one of the brackets hardest hit by the recession — fell by 4,060, a 0.9 percent dip from the previous month.

About half of young people remain without a job, however, underscoring the extent of the country’s economic difficulties. Spain also has the European Union’s highest overall unemployment rate, at 24.6 percent as of the end of the second quarter…

via The Associated Press: Spain to put another $7.5 bln in bank rescue fund.

Jerez de La Frontera, a Spanish town of 214,000 in southern Andalusia, is negotiating with unions to fire 13 percent of the 2,000 government workers who absorb 80 percent of its budget. “It’s not easy because these are people and families,” said deputy mayor Antonio Saldana.

With a quarter of Spain’s workforce already jobless, Prime Minister Mariano Rajoy’s efforts to retain investor confidence by shaving more than two-thirds off the nation’s budget deficit by 2014 will worsen the highest unemployment rate in the European Union. Ten-year yields at 6.86 percent mean “we can’t finance ourselves,” Rajoy said on Sept. 1.

Weeks after clinching as much as 100 billion euros in loans for the nation’s banks, Prime Minister Mariano Rajoy said he may request a second bailout once the European Central Bank details a proposed debt-purchase plan. Photographer: Angel Navarrete/Bloomberg

“There’s going to be less hiring and more firing for the spending cuts to be made,” said Ricardo Santos, an economist at BNP Paribas SA in London who sees unemployment climbing to 27 percent next year from 24.6 percent currently. “The more unemployment persists, the more difficult it’ll be for the government to meet budget goals and implement reforms.”

Television stations, airports, hospitals, schools, fire brigades and social services from Spain’s southernmost tip to the Balearic islands in the east are reducing headcount as Rajoy tasks regions and municipalities with shouldering 60 percent of the cuts needed to reduce the budget shortfall to 2.8 percent of gross domestic product in the next two years…

via Spanish Unemployment to Swell as Public Jobs Vanish: Euro Credit – Bloomberg.