Spain: Unemployment Nears 20%

With a 61 percent increase in unemployment since the start of 2008, the troubled Spanish economy is crushed under the need to support almost 20% of its workforce:

In the first year of unemployment, the government pays both unemployment benefit and some social security contributions. This will result in an unemployment benefit bill of over 30 billion euros ($43 billion) this year, up more than 50% from 2008. Payments may rise faster, as many of those made unemployed early were on fixed-term contracts and low salaries. On the revenue side, there are losses associated with lower tax receipts from the unemployed.

Worse yet, the rising deficit will breach the E.U. Stability and Growth Pact, requiring stringent budget cuts to try and reduce the deficit by 2012.

And we think we have it bad.

Posted August 23rd, 2009 Filed in International