In June Spain posted 98,853 fewer jobless claims, and Social Security contributions increased by 31,332. These developments offer a small glimmer of hope that, as the Spanish government has said, are good signs, but need to be looked at prudently.
It's also good that Spain's provider payment plan started to go into effect. Nontheless, factoring in averaging that balances for an increase in summer seasonal jobs, unemployment actually rose by 18,697 people relative to May, and Social Security contributions dropped 5,074. This is still good news.
On July 11 Rajoy will announce a stiff cutback package to help Spain meet its budget deficit objective for 2012. The measure is the other implicatoin of agreements reached during the EU summit last Friday so that bank aid funding will not affect public accounts: Spain must abide by EU guidelines to the letter.
The government knows that one of the measures will be accompanied by a drastic drop in public sector jobs that will affect some 300,000 workers from private and public companies, a good number of them within regional governments. The government is not bragging about the good news because it knows that upcoming cutbacks are going to have a negative effect on employment and, despite that fact, the cutbacks must happen in order for the country to move forward.
