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UNEMPLOYMENT / AUG. 18, 2014
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Public Debt and Unemployment in Spain at Record High

It’s not good news for Spanish citizens this week unfortunately. The Bank of Spain has announced today that public debt in the country has risen by a whopping £6.7bn resulting in both the central and regional government owing €988bn which is an alarming announcement that will leave many in the country reeling from the news. Spain’s public debt is now so high that it reportedly resembles Spain’s GDP by roughly 95%

The public debt in Spain accompanies record levels of unemployment as well, a report has stated that employment levels in the country may take up to 10 years to stabilize. What makes this report’s findings so unsettling as well is that even if Spain’s unemployment levels rose by 2% it would still take up to 10 years for unemployment levels to resemble Spain’s 2007 employment figures.

This does not appear to be a very positive outlook for Spain’s eligible workforce as it means 10 years of ongoing employment instability in a country that is reported to have a combination of low skill sets, and workers who currently earn at least 20% to 40% less in comparison to other European countries according to BBVA. With such high records of unemployment which is to blame for these salary inconsistencies  the BBVA says in its report the country is dealing with a double whammy in regards to its public debt and unemployment crisis.

This doesn’t look very encouraging for Spain as the bank also discovered via its own research that Spain’s commitment to investing in research is at least 70% lower than the EU and US average. This highlights that not only does Spain have a skill set shortage the country does not have sufficient skills to fulfil job roles within the technology sector either.

Spain is a country that desperately needs to find solutions to its unemployment problems which could easily be resolved if the country’s GDP rose by 0.6% the bank’s report states. It’s clear that if the country can resolve its unemployment troubles then the country’s public debt could also be resolved as well.

Spain is a country that has seen its fair share of economic instability recently. Reports also state that members of the Mortgage Victims’ Platform are staging protests in regards to repossessions. The Bank of Spain has reported that there has been a €6bn rise in overseas property investment since 2004, however, Spain’s economy right across the board in regards to public debt and unemployment means the country’s housing crises is just another alarming aspect of the country’s economic state.

The worst case scenario for Spain at the moment is that if the country cannot boost its rate of unemployment fast enough, public debt in the country will continue to spiral out of control as both issues are linked which is obviously fuelling the country’s complicated public debt and unemployment problems.

Image source – Reuters

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