By Humphrey Carter PALMA

AFTER a month from hell for the Minister for Tourism and Employment, Joana Barcelo yesterday, she claimed to have some good news - that the number of people out of work in the Balearics finally dropped last month.

But, as the data has been showing over the past week, the official jobless figures are relative because so many people have signed off and are no longer registered with the unemployment offices for various reasons and the latest active population figures claim that over 128'000 are out of work in the Balearics.

Nevertheless, Barcelo claimed yesterday that, here in the Balearics, which has one of the highest rates of unemployment in the Western industrialised world, the job market is moving forward “very slowly”.

The number of people registered as unemployed fell by 0.62 percent last year leaving 90'726 officially out of work at the end of last month.
However, this does not offset the fact that the Balearics has the highest year-on-year rate of unemployment in Spain.
Barcelo was forced to admit that the figure continues to be too high but claimed that the employment market is beginning to stabilise and that the government is continuing to find new formulas to stimulate the employment market.

The unions are not convinced. They are calling for a much greater effort from the government to create work and revive the employment market.
The Secretary Generals of the local UGT, General Workers' Union and the CC.OO Workers' Commission, Lorenzo Bravo and Katiana Vicens respectively, said that while they are still deeply concerned about unemployment in the Balearics, they are satisfied with the recent labour reforms central government has agreed with the unions claiming that they have “opened the door to hope for the future”. “We need this fresh social dialogue,” Vicens said “for a recuperation in the employment market and the economy.” But, apart from the Balearics, Spain's unemployment problem got worse last month while central government waits for the opposition Partido Popular to ratify the labour reforms it has agreed with the unions and employers. Spanish unemployment rose again in January, underscoring the importance of recent reforms designed to boost job creation and the need to increase tax revenue to allay fears that Spain cannot pay its debts.

The number of registered jobless rose by 3.2 percent from December to 4.2 million, the Labour Ministry said yesterday. Data last week showed the overall jobless rate at 20.2 percent in the fourth quarter, the highest in the European Union.

Unemployment is Spain's biggest economic headache as it fights to shrink a public deficit of around 9 percent of GDP.
Economists say the huge unemployment figures point to millions of Spaniards working either cash-in-hand or simply dodging taxes in a thriving black market the government estimates to be worth around 200 billion euros, or 20 percent of GDP.

The Treasury would welcome the extra income to help deflate one of the euro zone's largest public deficits, but cracking down on tax evasion and illegal employment carries a massive social cost for an unpopular government.

It is impossible to calculate the value of the hidden economy, but its existence explains how so many Spaniards continue to make ends meet despite an unemployment rate running at more than double the EU average, Jose Carlos Diez, chief economist at broker Intermoney, says. “How do you explain that, with 20 percent unemployment, there haven't been massive street protests? If the economy is a pressure cooker, the black economy is the valve which avoids full social unrest.” The issue of greater fiscal union in the euro zone will be high on the agenda today when the head of the bloc's paymaster, German Chancellor Angela Merkel, visits Spain.

Germany, as the euro zone's largest economy, will cover the lion's share of a rescue fund for countries struggling to pay their debts, a bill Merkel is finding difficult to sell to Parliament.

A euro zone fiscal cleanup, which would ideally include tackling income tax evasion, would make it easier for Merkel to convince her electorate.