Spanish unemployment tops 27%, protests near parliament

Spain's unemployment rate surged past 27 percent to a new record in the first quarter of 2013, official data showed Thursday as a deep recession ravaged the eurozone's fourth-largest economy.

A record unemployment number also emerged in neighbouring France, the eurozone's second-biggest economy, as the labour ministry said jobseekers in France surged by 36,900 in March to 3.224 million, beating a record set in 1997.

Spain's new figure put its jobless rate just below that of bailed-out Greece -- the highest in the European Union at 27.2 percent.

Hundreds of people, mostly youths, gathered Thursday evening near the Spanish parliament in Madrid in response to a call by a hardline protest movement for demonstrators to "Besiege Congress" indefinitely to force the government to quit.

The protesters chanted "We are not afraid" as they marched from three different points in the centre of Madrid before converging in a square in front of parliament which was protected by police barricades.

Police said 1,400 officers would be deployed to prevent violence.

Before the demonstration started police arrested four members of anarchist groups suspected of plotting to set fire to a bank and 11 people who blocked access to a university.

Some held signs that read "6.2 million reasons" in a reference to the latest jobless figures.

Spain's jobless rate leapt to 27.16 percent from the previous quarter's figure of 26.02 percent, and reached a huge 57.2 percent among those under 25 years old, the National Statistics Institute said.

The number of unemployed climbed by 237,400 people to 6.2 million, it said in the latest gauge of damage wrought by the collapse of Spain's property bubble in 2008.

Spain, once the motor of job creation in the 17-nation single currency area, is now struggling through a double dip recession brought on by the collapse of the boom.

Its economy contracted by 1.37 percent last year, the second worst yearly slump since 1970, and the government forecasts it will shrink again by between 1.0 percent and 1.5 percent this year.

In France March was the 23rd consecutive month of rising unemployment, as Socialist President Francois Hollande struggles to revive a stagnant economy that is threatened with recession.

Hollande has pledged to curb the unemployment rate to a single-digit figure by December.

The French labour ministry did not provide a current unemployment rate, but said it was at 10.2 percent at the end of 2012 and remained below the 10.8 percent record set in 1997.

The surge in unemployment is also a major headache for Spanish Prime Minister Mariano Rajoy, whose conservative Popular Party was swept to power in a landslide general election win in November 2011 on the back of promises to reverse a tide of rising joblessness.

Rising unemployment has caused evictions to soar, overwhelmed food banks with demand and forced tens of thousands of people, particularly youths, to leave in search of work abroad.

The number of households in which all eligible members are unemployed reached 1.91 million in the first quarter, the statistics office said.

Rajoy's government has reformed labour laws to make it easier to hire and fire workers and imposed harsh austerity measures which he says are needed to curb the public deficit and help the country save 150 billion euros ($196 billion) by 2014.

His government was due on Friday to unveil a further package of economic reforms.

On Wednesday, Rajoy told parliament the job outlook this year "will not be good, but it will be less bad than in the preceding years.

"Next year we will have growth and jobs will be created in our country," he added.

London-based analyst Raj Badiani of IHS Global Insight warned in a note that the latest figures "suggest that Spain lacks the tools to break free from the recessionary spiral" and said it needed extra short-term measures to support employment.