Euro Crisis

Labor Regulation Seen Driving Spanish Unemployment to 30 Percent

Too risky to hire full-time workers

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Is it only going to get worse before it gets better?

Societe Generale think so: as the chart says, they're expecting it to reach 30 per cent in 2015 (from an already-awful and record-breaking 27.2 per cent, at last count). The country's unemployment rate has historically tended to be high — only falling below 8 per cent right at the peak of the boom. Michala Marcussen says Spain's particular problem is its gap in conditions for permanent and contract staff:

"In our opinion, much of this is attributable to the dualism that results from the very large dismissal cost gap between permanent and temporary job contracts. Successive reforms have sought to reduce this gap, but even after the latest reform it remains too high."