New Headaches for Spain, Rajoy and Rato

Another blow out number by Spain. Unemployment is now above the magic 25% level. Uncharted territory…From Bloomberg.

Spanish unemployment climbed to a record in the third quarter as a deepening recession left one in four workers jobless, adding pressure on Prime Minister Mariano Rajoy to seek a second European bailout.

Unemployment, the second highest in the European Union after Greece, rose to 25.02 percent from 24.6 percent in the previous quarter, the National Statistics Institute said in Madrid today. That is the highest since at least 1976, the year after dictator Francisco Franco’s death ledSpain to democracy.

“The situation is serious,” Ricardo Santos, an economist at BNP Paribas SA in London, said by telephone. “There is still room for a deterioration in unemployment. Activity is weak and the government will reduce jobs as there are strict targets to adjust the number of public-sector temporary workers, especially in health and education.” (Full read here).

Meanwhile, the not so popular Mr Rato is about to get some uncomfortable questions with regards to the collapse of Bankia….

From El Pais.

Rodrigo Rato, a former IMF managing director and economy minister under the premiership of José María Aznar, has been ordered to appear before the High Court on December 20 in connection with an investigation into the establishment and flotation of Spanish bank Bankia, which was nationalized shortly after Rato resigned as its chairman.

High Court Judge Fernando Andreu is investigating five possible offenses in Bankia, including falsifying documents, fraud and misappropriation. (Full read here).