Spain unemployment hits record levels

LONDON, UK – Unemployment in Spain has hit a record high, official figures released Friday show.

The news comes hours after rating agency Standard & Poor’s downgraded Spain's sovereign debt for the second time this year.

The number of jobless in Spain reached 5,639,500 at the end of March, with 365,900 people having lost their jobs in the first three months of the year, according to the country’s national statistics agency.

Unemployment in Spain now stands at 24.4 percent, the highest in the European Union, and is expected to rise further this year, the BBC reports.

Earlier this week, the Bank of Spain announced that the economy had shrunk by 0.4 percent in the first quarter of 2012, after contracting by 0.3 percent in the final three months of last year.

Official figures due to be published on Monday are expected to confirm that Spain has slipped back into recession.

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According to the Associated Press, Spanish Foreign Minister Jose Manuel Garcia-Margallo told Spanish National Radio: “The figures are terrible for everyone and terrible for the government. Spain is in a crisis of enormous magnitude.”

Friday’s news is another blow to the conservative government of Prime Minister Mariano Rajoy, which has angered unions by pushing through severe spending cuts and labor reforms to try to reduce Spain’s spiralling debt levels.

Late Thursday Standard & Poor’s dropped Spain’s long-term credit rating from A to BBB+, adding that the outlook on the rating is negative and warning that a further downgrade is possible.

There are now concerns that the Spanish government will not meet deficit targets agreed with the European Union and be forced into seeking a bailout as Greece, Ireland and Portugal have done before, The Daily Telegraph reports.

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