Govt says 8 bln euro public works plan slows jobs decline
Unemployed sceptical about government temporary jobs By Andrew Hay
SPANISH jobless claims fell in May for the first time in 14 months as a government temporary work plan and seasonal hiring tamed the European Union's fastest rising unemployment rate.
After months of long lines outside unemployment offices, the number of dole seekers fell by 24'271 in May as an 8 billion euro ($11.39 billion) public works plan created hundreds of thousands of short-term construction jobs across Spain, Labour Ministry data showed on Tuesday.
The measures put in place by the government are putting the brake on job destruction, said Employment Secretary General Maravillas Rojo in a statement.
Jobless claims fell across all sectors from industry to agriculture as firms cranked up for the key summer tourist season and consumer confidence recovered after the twin shocks of the global crisis and a domestic housing collapse.
The government said it was too early to call a turning point in unemployment but saw job destruction slowing after a year in which Spain delivered about half of all layoffs in the European Union.
The fall in dole claims cut total joblessness to 3.62 million, still the highest absolute level of any euro zone economy, including Germany, which has nearly twice the population.
Spanish unemployment rose to 17.4 percent in the first quarter and the European Commission expects it to top 20 percent next year because Spain is forecast to be the last member of the European Union to exit recession, likely in 2011.
Analysts said the worst of Spain's job destruction was over but feared a new round of layoffs later in the year when temporary public works projects - ranging from building bike paths in Galicia to moving a statue in Madrid's city centre - run out.
From September we could start to see job losses again, said Nicolas Lopez, research director at the M&G consultancy.
Government anti-crisis spending will add 150 billion euros to the stock of public debt by the end of next year, according to Economy Minister Elena Salgado.
For the few jobless waiting outside an unemployment office in central Madrid on Tuesday, an economic and financial recovery could not come too soon.
They said the government's Plan E (Plan for Economic Stimulus and Employment) to create 400'000 short-term jobs was a bandaid on deeper problems.
There is no credit to finance projects, said unemployed topographer Sixto Limon, laid off by construction firm Ferrovial. Everyone knows Plan E jobs are rubbish.