Spain's unemployment rate hits 25%

One Spaniard in four is now officially out of work as the economic crisis tightens its grip on the country.

The National Statistics Institute said Friday that 85,000 more people joined the ranks of the unemployed between July and September, raising the total to 5.78 million.

The figures brought the country's unemployment rate up by around 0.4 percentage points in the third quarter to 25.02 per cent.

For those under 25 years of age, the unemployment rate edged down marginally to 52 per cent from 53 per cent in the previous quarter.

The institute said that over the past 12 months some 800,000 people had lost their jobs. Spain is under pressure to ask for outside aid to help deal with its debts. The country is in its second recession in three years.

Bailout could stretch EU finances

It has already been granted a100 billion ($129 billion Cdn) bailout facility for its troubled banks while many of its regional government are also in bad financial shape.

In September, the European Central Bank said it would buy unlimited amounts of bonds in countries struggling with their debts if they formally apply for aid.

This has helped Spain by lowering its borrowing costs, but conservative Prime Minister Mariano Rajoy has held off triggering the actual purchases.

Spain is one of the focal points in Europe's debt crisis because if it defaulted or needed a full-blown bailout, the finances of the 17-country group that uses the euro could be severely stretched.

Rajoy's government, which pledged to reduce unemployment in its electoral campaign last year, has introduced austerity measures and financial and labor reforms to convince investors it has a grip on its accounts but they have yet to show any positive effect on the economy.

The measures, in particular the labor reform that makes it easier to dismiss workers, have led to many strikes and protests.

Tens of thousands need food

The country faces its second general strike in a year Nov. 14. On Friday, yet another rush-hour go-slow by subway workers caused traffic chaos in the Spanish capital.

Organizations such as the Spanish Red Cross and the Catholic Church charity organization Caritas say unemployment and the austerity measures are leaving tens of thousands of people in need of food and financial help.

On Thursday, Caritas said the foundation run by Amancio Ortegafounder of the Zara store parent company Inditexwould donate20 million to help buy food, medicines and school material.

The statistics institute said Spain now has 1.8 million households in which no one has work.

The institute said the once-booming construction sector is the worst hit, with 56,100 fewer jobs.

Of Spain's 17 regions, southern Andalusia lost most jobs58,400while northeastern Catalonia saw its unemployment numbers increase by 36,300.