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The latest batch of quarterly jobs data before the December Spanish general election was released this morning. The headline figures are nothing short of a boon for Prime Minister Mariano Rajoy – but is it really all good news? Our Southern Europe expert Vincenzo Scarpetta gives his view.
22 October 2015
Spanish national statistics institute INE this morning released the most awaited and politically significant batch of quarterly jobs data of the past four years – the last one before the 20 December general election.
I bet Prime Minister Mariano Rajoy is satisfied. The headline figures are nothing short of a boon for the upcoming election campaign. The number of unemployed people fell by 298,200 in the third quarter of the year compared to the previous quarter, and by 576,900 compared to the third quarter of 2014 – the sharpest drop on records.
This is crucial for two reasons. Firstly, it allows Rajoy to claim that he has kept his flagship electoral promise: there are fewer Spaniards out of work now than when he took over power four years ago. Secondly, it brings the number of unemployed people below the ‘psychological threshold’ of five millions.
However, I think it is still premature to say that the Spanish labour market has turned the corner. The table below compares today’s data with the situation Rajoy ‘inherited’ when he entered office.
A few points are worth making:
In other words, this is no time to rest on laurels. More needs to be done to address the duality of the Spanish labour market and, perhaps even more importantly, help long-term unemployed return to work via better and more targeted re-training programmes.
I have no doubt the economy, and unemployment in particular, will dominate the Spanish election campaign. Rajoy has a strong card to play. The numbers are on his side, but – as I argued in the past – there is a difference between macroeconomic indicators getting better and real people feeling a real recovery. The challenge for the Spanish Prime Minister will be to convince more voters that his is the only viable recipe to put the country’s economy back on track.