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Debt crisis: Spain’s jobless flee to Argentina

October 8, 2012

Thousands in Spain took to the streets last week to protest against sweeping austerity cuts planned by the government to get its deficit down.

Prime minister Mariano Rajoy said on Friday that the government would “meditate” on whether to ask for a bail-out from Brussels, but repeated that he would do what is in the best interests of Spaniards.

“Cheap financing and the availability of credit is fundamental. Without it it’s difficult that there will be jobs, credit and confidence, and we will take the decision we believe is the best for the general interests of Spain,” he said.

The number of unemployed Spaniards rose to 4.7 million last month, according to the country’s labour ministry, taking Spain’s unemployment rate to 24.63pc – the highest in the industrialised world.

The services sector was the hardest hit, with more than 85,000 job losses seen.

Argentina’s president Cristina Kirchner has tightened protectionist trade barriers and virtually halted domestic dollar buying in a bid to stem capital flight from the country.

Last month, rating agency Standard & Poor’s said that further tightening “could exacerbate the existing weaknesses in Argentina’s economy, including high inflation and increasingly rigid government expenditures, and result in a deteriorating medium-term fiscal outlook and investment climate.”

Disputed inflation figures also prompted International Monetary Fund (IMF) chief Christine Lagarde to warn Argentina last month that it could face sanctions such as the loss of voting rights and even expulsion from the IMF unless it produced reliable data.

Mrs Lagarde said the the IMF had given Argentina a “yellow card” over the official rate of inflation, which Argentina claims is 10pc.

Argentina has until December 17 to address the problem.


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