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TheStreet Open House

Spain's Unemployed Inching Up To 5 Million

By CIARAN GILES

MADRID (AP) â¿¿ The number of people officially registered as unemployed in Spain has edged up toward 5 million as the country's recession shows few signs of abating and its struggling banks await crucial bailout cash.

Spain's Labor Ministry said Tuesday that unemployment rose a monthly 74,296 in November, or 1.5 percent, to a record 4.9 million. The country's unemployment rate is released separately and quarterly. It stood at 25 percent at the end of the third quarter, with the youth unemployment rate standing well above 50 percent.

The figures come a day after finance ministers from Spain's euro partners approved the release of ⿬39.5 billion ($51.6 billion) in bailout aid for Spanish banks worst hit by the property market collapse in 2008.

The funds are part of a ⿬100 billion rescue package earmarked for Spain's banks that was agreed with the other 16 European Union countries that use the euro back in June. The loan package is designed to ease the pressure on the Spanish government so it can concentrate on managing the national finances as well as those of the regions and avoid a full-blown sovereign bailout.

The ⿬39.5 billion figure includes ⿬37 billion in loans for four banks already nationalized by the Spanish government. The money is to begin arriving next week. Under the deal, Bankia will get ⿬18 billion, Catalunya Caixa ⿬9 billion, Novagalicia ⿬5.5 billion and Valencia Bank ⿬4.5 billion.

In return, the entities must reduce the size of their business by 60 percent, branch numbers by 50 percent, stop lending to real estate development and concentrate on retail loans and those to small and medium-sized companies in their base regions.

"The implementation of the program is on track," said Jean-Claude Juncker, the Luxembourg prime minister who heads the eurogroup of finance ministers.

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