To the naked eye, new data from Spain’s National Statistics Institute appears positive. The unemployment rate in the second quarter was 26.3%, down from 27.2% in the first three months of the year. However, the difference barely matters. Spain’s jobs situation is as severe as that in the United States during the Great Depression, but the European nation lacks a colossal economic engine to pull it out of its trouble.
The BBC pointed out that the slight improvement may be due to the fact that the second quarter is tourism season. If that is true, the tick higher will quickly fade.
The extent to which Spain is hampered from improving its employment position is considerable. Its debt-to-GDP ratio is among the highest in Europe and is rising more quickly than most, up 15.2% from the first quarter of 2012 to the first quarter of this year. No matter what else this does to harm Spain’s economy, it most certainly means that austerity measures will remain in place as many alarmed officials in the European Union, particularly in Germany, try to force Spain to cut its way to prosperity.
Eurostat reports that GDP per capita in Spain is also weak, a sign that a consumer-based recovery is unlikely. Spain’s ratio is 97%, compared to that of 121% in Germany. Worst of all, Spain’s gross domestic product contracted 0.5% in the first quarter, and it also fell in each of the final three quarters of 2012.
Taken in sum, these economic figures show how desperately Spain needs outside help to keep from becoming barely a developed nation.
As if matters could not worsen, the current level of unemployment in Spain among its youth is double. An entire generation of people will suffer double-digit joblessness for what likely will be several years. These people will lack the income to be consumers and will continue to drag on whatever government assistance survives austerity.
There is no information about Spain’s economy that could lead a rational outsider to believe that the jobless rate will drop to below 25% in the foreseeable future.
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