Spanish Unemployment Tops Record, Rising At Fastest Rate In A Year

In yet another worse-than-expected macro data point, Spain has just breached the 27% unemployment level - the highest since at least 1976, when data began following dictator Francisco Franco's death. At 27.2% this is already higher than the IMF's year-end estimate of 27% suggesting growth estimates are already overly optimistic.

What is more concerning is the rate of increase in the joblessness is rising once again. The 1.1 percentage point rise is the largest in a year and 177,700 more households now have no actively employed members than a year ago. The greatest fear though, for European leaders and the Spanish people themselves, is the surge in youth unemployment.

As we have noted a number of times in the past, the possibility of social unrest is exaggerated significantly by this number and at an incredulous 57.2% of under-25s out of work, Spain is closing in on Greece, according to official data, for the worst youth unemployment situation in Europe. Read more >>

Spain's recession exposed - unemployment at 26 percent

Spain’s scars from the slump that overshadowed Prime Minister Mariano Rajoy’s first year in office will emerge this week as data show the toll on economic output that may have kept as many as 6 million people out of work.

Spanish exports fell 0.6 percent in November from the same month the previous year, when they had risen 7.4 percent, the Economy Ministry said today. House-price data tomorrow will show if the property market endured a fourth year of declines. The Bank of Spain may also release its estimate for fourth-quarter gross domestic product, and the data will culminate in jobs figures on Jan. 24, forecast by economists to show a record 26 percent of Spaniards unemployed.

Officials predict the euro-area’s fourth-biggest economy faces a further slump this year at a time when the government will struggle to meet its budget goals. Such a backdrop hasn’t deterred investors, with the prospect of a European Central Bank backstop in the event of a bailout enabling the Treasury to fast-track higher 2013 funding needs, selling 16 billion euros ($21 billion) at its first three auctions at lower costs.
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One Quarter Of All Spanish Workers Without A Job: Female Unemployment In Ceuta Region Hits 57%

One in four Spaniards are now officially out of work - well over double the euro-area's average 11.4% rate. This is the highest rate of unemployment since the Franco dictatorship ended in the mid-1970s as 5.8 million now stand idle.

Perhaps more stunning is the fact that eight of the bailout-nation's regions have higher unemployment rates than the national average with Cueta at a stunning 41.03% (with women's unemployment rate in that region an almost incomprehensible 56.92%)!!

The YoY increase of almost 800,000 people unemployed leaves 1.74 million households with no members employed. As one would expect, loan delinquencies are also surging as Caixabank just almost doubled its pool of bad loans in the third quarter. While Rajoy fiddles...Read more >>

Austerity Protests Erupt in 80 Cities Across Spain

Anger over austerity measures spilled into the streets across Spain on Thursday after parliament passed an $80 billion austerity package. Tens of thousands of protesters across 80 cities demonstrated against the imminent cuts, which include pay cuts for civil workers, an increase in sales tax, benefits cuts and a raise in retirement age.

The austerity measures were announced last week by prime minister Mariano Rajoy. Since the announcement, protests have broken out on an almost daily basis. Thursday's demonstrations, however, were the largest--swelling after Rajoy officially passed the measures through parliament with the aid of his center-right Popular Party.

Meanwhile, Germany's parliament approved a Spanish 'rescue package' worth up to $122 billion for Spain's banks. During the protests, a blockade of civil servants closed off several main roads in Madrid, while protesters chanted, "Hands up, this is a robbery!" Read more >>

Spain braces for 3rd austerity round amid hemorrhaging tax receipts

Spanish Prime Minister Mariano Rajoy may unveil a third austerity round within days as his six-month- old government tries to avoid a second bailout amid hemorrhaging tax receipts. Rajoy said on July 2 the time has come to “press the accelerator pedal” as he tries to tame bond yields. Government officials have said they are considering raising taxes on gas and products that have a reduced rate, such as food, hotels and restaurants.

Rajoy plans to announce an overhaul of public administration this week, Maria Dolores de Cospedal, his deputy in the ruling People’s Party, said today. Spain’s return to recession is undermining efforts to cut the euro area’s third-largest budget deficit as tax receipts shrivel. Ten-year bond yields climbed back above 7 percent today as European finance ministers meet to discuss the worsening debt crisis. Spain became the fourth euro-region country to seek a bailout in June to shore up banks burdened with bad loans.

“The commission will make its proposal for a new path of fiscal adjustment” for Spain at a meeting of euro-area finance ministers tonight, Economy Minister Luis de Guindos told reporters in Brussels. “We will analyze its implications and explain the measures we are taking and that we will take.” Read more >>

Europe's Next Bailout: Italy

Business Insider
While analysts have been making a big deal about the bank bailout in Spain this morning, it is important not to forget about Europe's next-biggest problem: Italy.

Yields on Italian government bonds are shooting through the roof today, as investors wonder how much stronger Italy's banks are than Spain's.  In neither case, it would appear, to they believe that the bailout has divorced financial sector stress from that on the government.

The Italian FTSE MIB has also lost all its earlier gains, now down 0.6 percent today.

Check out Italian 10-year yields, up 23 bps so far today:

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Next Bailout: Spain - Economy Faces "Crisis of Huge Proportions"

BARCELONA, SPAIN - MARCH 30: A Carslon Wagonlit Traves employee is seen through a broken window on March 30, 2012 in Barcelona, Spain. 

Spain's sickly economy faces a "crisis of huge proportions", a minister said on Friday, as unemployment hit its highest level in almost two decades and Standard and Poor's downgraded the government's debt by two notches.

Unemployment shot up to 24 percent in the first quarter, one of the worst jobless figures in the developed world. Retail sales slumped for the twenty-first consecutive month as a recession cuts into consumer spending.

"The figures are terrible for everyone and terrible for the government ... Spain is in a crisis of huge proportions," Foreign Minister Jose Manuel Garcia-Margallo said in a radio interview.

Standard and Poor's cited risks of an increase in bad loans at Spanish banks and called on Europe to take action to encourage growth. More...