Spanish unemployment hits 25 percent

Oct. 26, 2012 at 1:14 PM
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MADRID, Oct. 26 (UPI) -- Unemployment rose in Spain in the third quarter, hitting a record 25 percent, up from 24.6 percent in the second quarter, the government said Friday.

The National Statistics Institute said the unemployment rate was 52 percent in the 16-24 age group, the BBC reported.

With Spain on the brink of asking for financial assistance from the international community, the unemployment rate will have serious cross-border ramifications, observers say.

Confidence in the Spanish economy allows the government to take part in the open bond market, a system in which it borrows from investors to pay its bills, but if confidence falls demand for Spanish bonds will also drop, which means its borrowing costs will rise.

In turn, that could force Madrid to signal that it is ready to apply for help from other eurozone members that have already set aside $130 billion to help Spain keep its troubled banking sector afloat.

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