Spain announces €3.5bn fund to ease youth unemployment

Spanish Prime Minister Mariano Rajoy

Mariano Rajoy’s Spanish government has announced a €3.5bn plan over four years aimed at stemming the country’s rising tide of youth unemployment.

Dubbed the ‘100 measures’, Rajoy’s catalogue of plans have been introduced in an effort to reduce Spain’s 55 per cent unemployment among its youth; yet some labour unions have already expressed their scepticism.

The Prime Minister spoke to an enrapt audience of government officials, company figureheads and union representatives in Madrid this week. The first of his announcements included tax breaks for young freelance workers and companies that hire staff in their twenties.

Additional measures included lower social security contributions for young autonomos (self-employed individuals) and unemployment benefit paid to budding entrepreneurs hoping to start their own business. But perhaps the most encouraging announcement was the promise that young interns currently undergoing an official training programme would be offered a contract within four months of completion.

Details of many of these ‘100 measures’ had been previously announced, but this week’s speech by Rajoy wrapped them together into a more complete package. With public anger at austerity measures growing, Rajoy is hoping that these, often radical, solutions will not only ease the burden on Spain’s youth but also buy his government some much-needed brownie points.

The knives were quickly out, however. Spain’s labour unions were soon on the attack, stating that the measures would only have a limited impact so long as the government persisted with its austerity plans.

“If the government does not re-orient its economic policy to make growth and jobs a priority instead of deficit cutting, the effects of the plan will have a limited impact and the economic recession and job destruction will continue,” said a joint statement released by CCOO and UGT – the two biggest unions in Spain.

In response, Rajoy reiterated that any stimulus measures would not dilute his government’s desire to bring Spain’s deficit in line with EU regulations.

In short, austerity will continue, but these ‘100 measures’ – with funding drawn from a European Special Fund – should at least ease the pain for some of those hit hardest.