09/01/2012 Spain (KMC) - New figures released from Eurostat have revealed that nearly one in four Spaniards are now unemployed. The unemployment rate has risen from 21.5% to 22.9%, meaning that Spanish citizens now count for at least one in five of Europeans without jobs.
The social security system has also slipped into the red for the first time since 1999 and according to finance minister Luis de Guindos, the welfare state is also under threat.
The situation is unlikely to improve any time soon as new Prime Minister Mariano Rajoy implements cuts and higher taxes in a bid to dent the current 8% budget deficit.
One of Rajoy´s first economic moves was to raise income tax, with higher earners now paying 56%, putting Spain at the top of the tax scale for those that are better off along with Sweden and Denmark.
It is also likely that there will be a partial sell-off of public assets such as airports and the lottery in order to raise more funds.
Some have criticised Rajoy for creating an austerity culture, with fears this will only sink Spain back into a recession or at best leave Spain with zero growth.
Rajoy has set his government the target of reducing the deficit by €40 billion this year to leave it at 4.4%, however the tax rises and spending cuts announced so far account for less than half of this target, leaving most wondering what cuts have still to come.