The unemployment rate in Spain has risen to nearly 25 percent which goes to show how much worse the economic situation has become in the country in recent years. The figure has also caused the credit ratings agency, Standard and Poor’s to downgrade the credit rating of the country. Currently around 6 million people in the country are unemployed according to the government’s National Statistics Institute.
The credit rating agency dropped Spain’s credit rating by two notches, rather than just one, and stated that they expect the economic recession in the country to continue until 2013. Spain is already struggling to reduce its annual deficit and reduce the amount of debt in the public sector. It is possible that they are going to require more financing from the banking sector. The country now has a credit rating of BBB+ making it a low grade investment.
The Foreign Minister of Spain was recently involved in a radio interview in which he stated that the employment rate is terrible for the people and terrible for the government. He commented, “The crisis in Spain is enormous.” The government have said they are committed to reducing the deficit in line with EU recommendations.