• 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 per cent to 25.02 per cent
The unemployment rate in Spain is above 25 per cent for the first time - with more than half of young people out of work, new figures have revealed.

Between July and September, 85,000 more people joined the ranks of the unemployed raising the total to 5.78 million, the National Statistics Institute said today.

The figures brought the country's unemployment rate up by around 0.4 per cent to 25.02 per cent.

jobseekers Spain
© AlamyTough times: The unemployment rate in Spain is above 25 per cent for the first time - with more than half of young people out of work. People are pictured queuing at a job centre in Madrid.

For those under 25, the unemployment rate edged down marginally to 52 per cent.

The institute said that over the past 12 months some 800,000 people had lost their jobs, proving that the economic crisis is tightening its grip on the country.

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.

It has already been granted a 100 billion Euro bailout 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 protests
© Getty ImagesAnger: Over the past 12 months 800,000 people had lost their jobs. Spain's economic troubles have led to a number of protests in Madrid, including this one in September.
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. The country faces its second general strike in a year November 14.

Today, yet another rush-hour go-slow by subway workers caused traffic chaos in the Spanish capital.

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

Yesterday, Caritas said the foundation run by Amancio Ortega - founder of the Zara store parent company Inditex - would donate (euro) 20 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 jobs - 58,400 - while northeastern Catalonia saw its unemployment numbers increase by 36,300.

Spain protests
© Getty ImagesFury: For those under 25, the unemployment rate is 52 per cent. Demonstrators confront police near the Spanish parliament in September.
Spain makes progress in reforming financial sector

Spain has made progress in reforming its financial sector, but needs to keep up the momentum, the International Monetary Fund said today.

The IMF, along with the European Central Bank and European Commission, concluded a visit to the country today to review its progress in reforming the financial sector.

Spain got a loan from the 'troika' of lenders of up to 100 billion euros ($130 billion) to recapitalize its banks after the collapse of its property market.

Spain is also considering tapping euro zone rescue funds to help prop up the nation's troubled finances.

'Important progress has been made in reforming the financial sector,' the IMF said after visiting the country. 'It will be important to maintain the momentum as challenging steps lie ahead.'

The IMF also said Spain's financial market conditions have improved since the ECB agreed to an unlimited bond-buying program for nation's that ask for a bailout, but conditions remain fragile.