Spain leads the way as new figures show unemployment in the 17-country eurozone leaping to record highs. Together with recent forecasts of little or no growth for the region in 2012, economists say the figures suggest another grim economic year ahead.
The government figures showed unemployment in March climbing for the eighth straight month to reach 4.75 million people, a record high. The statistic comes a day after a similarly worrying report for the eurozone, showing unemployment for the currency region also steadily rising to reach 10.8 percent in February.
Together with recent forecasts showing the region's economy is likely to fall back into recession in 2012, economists say it means another tough year for the eurozone.
But Spain is particularly hard hit. Nearly one in four working-age Spaniards is jobless. That figure rises to more than 50 percent for those under 25.
Economics research fellow John Springford, of the London-based Center for European Reform, says the nature of Spain's labor market, with a large chunk of workers on precarious, short-term contracts, compounds the country's problems.
"It is looking extremely bleak. The eurozone is projecting that we are going to see a downturn of about 2.2 percent in Spain. And this seems quite optimistic, to be honest, because the level of indebtedness in the private sector is so great. So, the government's caught up in this very difficult position," Springford said.
On Friday, the Spanish government unveiled its most stringent budget in decades - and vowed to stick to it, despite massive protests against more austerity measures. The cuts fall in line with E.U. budget-cutting prescriptions for other economically ailing members, like Greece, Portugal and Ireland.
But Springford joins a number of analysts in criticizing the measures.
"In many ways it has been self-defeating. If you look at Greece and Ireland, we have seen very, very large falls in GDP. We have seen an increase in debt for the whole economy and we have had, in Greece's case, a second round of a bailout - and that is something that may well be possible in Ireland. So the strategy has quite large risks," Springford said.
The Spanish government says it will not need an EU bailout. But Springford for one, is not so sure. He and some other analysts also criticize last week's agreement to boost the Eurozone bailout fund. They say the new amount falls short of what is needed to protect the eurozone from market speculation or to meet simultaneous requests from Spain and other struggling economies for financial help.
