STAFF REPORTER

BRUSSELS
SPAIN will take longer to emerge from the current economic crisis than most other European member states, said a report published by the European Commission yesterday.

The country's economy is predicted to shrink by 3.7 percent this year and there will be additional downturn of 0.8 percent in 2010, said the EC. Although there will be a “light recovery” of 1 percent in 2011, by that time, over a fifth of Spain's working population will be unemployed.

The lingering effects of recession in the country are due to the particular difficulties in the construction industry where growth is at a minimum. Whilst some countries in the Euro zone such as France, Germany and Italy have already put paid to the crisis, the “positive growth” factor will not, said the European Commission, be confirmed until the third quarter of 2010. Only Latvia, Lithuania and Bulgaria will take as long as Spain to turn their fortunes around.

Shrinking economic activity in Spain has pushed up the numbers of jobless to the point where 17.9 percent of the working population is without work this year. This figure will rise to 20 percent next year and 20.5 percent in 2011. It is the highest in the European Union and doubles the EU's average unemployment rate. National debt is set to rocket to 11.2 percent of the Gross National Product (PIB) this year and will hover around the 10 percent mark next year. This is due to the fact that Central Government's income has plummeted as a result of dwindling business taxation, crippling sums which need to be handed out to meet the needs of the unemployed and economic measures taken to tackle the recession such as the so-called “Plan E” - a government aid package paid to local councils across the country in an attempt to kick start the construction industry through public building and reform works. “There's a danger that the Spanish government won't be able to sustain the programmes it has put in place with public money over a long period of time,” said one European Commission spokesman.

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