The number of registered unemployed workers at the end of December rose to 4.8 million, which is 426,364 more jobless workers than last year and a record high since this kind of data started to be collected in 1996.
Obviously the figures are bad, but a glimmer of optimism appeared at the last hour of 2012 as 59,094 workers got off the unemployment list. The government interprets this change as an indicator that the labor markets could be improving. What is not improving is the Social Security system. The number of workers contributing to the system fell by 787,240 (4.57%). This significant loss has direct effects on the proportion of active workers to every retiree. That ratio has dropped from 2.25/1 to 1.9/1 in the past ten years.
These figures confirm doubts that arose in November about how all the Social Security administrations were managing their budgets. At year end there was an 10-billion euro deficit even though Montoro predicted that the system would break even. All said, the Ministry of Finance will be able to make up lost ground by raising taxes, particularly the VAT, despite resistance.
At this point, it will be hard, or impossible, to meet the EU?s 6.3% debt/GDP ratio. Montoro admitted yesterday that seven regional governments overshot their objectives. The worst part is that five are governed by leaders from his party and one of them, Extremadura, was allowed to pay bonuses to civil servants. The Ministry should take action immediately.
