Brussels sees unemployment in Spain at over six million in 2013

Unemployment indicators will continue to break records in Spain, according to the autumn forecast released Thursday by the European Commission, which predicts that the number of people without jobs will rise to six million by 2013.

The report, which was released by the European Union for economic affairs, Olli Rehn, also questions the government’s outlook for GDP and the budget deficit.

Brussels expects that at least 2.7 percent of jobs will be lost in 2013, which is equivalent to about half a million people. If this forecast is accurate, the unemployment rate would rise to a new record of 26.6 percent. Nevertheless, the Popular Party government of Prime Minister Mariano Rajoy believes the unemployment rate will fall to 24.3 percent next year when, officials say, the economy will start to grow slightly, creating 30,000 jobs. Currently, the Spanish jobless rate remains the highest in the European Union at just over 25 percent.

The EC, which also tears apart the government's own economic forecasts, emphasizes that job destruction is not only affecting temporary workers, but is also hitting hard at those who have permanent contracts.

Regarding the government’s labor reform, Brussels believes that in the future it will allow greater “flexibility” for companies. “It may take some time before the first positive effects are manifested,” the report said. But employees in Spain will continue to see a loss in purchasing power as salaries stay put, and inflation remains high, the EC said.