Spanish unemployment hits 4 million

The number of unemployed Spaniards last month rose above four million for the first time in the country's history, official data revealed yesterday, underlining the scale of its economic collapse.

The government said 125,000 people registered as unemployed last month, taking the jobless total to 4.05 million, or about 17.5 per cent of the working population.

Spain is the only major Western economy that has yet to emerge from recession, with a collapse in its construction industry having spread quickly to manufacturing and services. By contrast, German has around 3.6 million unemployed people, despite having a population that is twice the size of Spain's.

Within Spain, there is also widespread cynicism about the government's figures. The National Statistics Institute said last week that unemployment had reached 4.3 million, equivalent to a joblessness rate of 18.8 per cent.

But trade unions put the true figure at almost 4.5 million, representing almost 20 per cent of those available to work.

In some areas, such as the Balearic islands, unemployment rates of 45 per cent have been reported.

Maravillas Rojo, the government's employment secretary general, attempted to put a brave face on the figures yesterday, insisting the rate at which joblessness was increasing was beginning to slow.

"January is a bad month for unemployment," she said. "Historically, it rises in that month, even when the economy is growing."

Even so, the government's own projections are for unemployment to rise above 20 per cent this year, before beginning to decline. Its efforts to stimulate the economy and create jobs will also be hindered by the promises it has made to begin tackling national debt.

It has pledged to get the budget deficit down to 3 per cent of GDP by 2013, from 11.4 per cent last year. That equates to spending cuts of about €50m (£44m).

Nevertheless, the socialist Prime Minister, José Luis Rodriguez Zapatero, has promised new policies to tackle joblessness.

Ms Rojo said yesterday that Mr Zapatero was "aware that the situation demands new measures" and said he would "present proposals" at a meeting with unions and business leaders.