Extension of extra unemployment benefit in Spain

Government to extend 420 euros hand out to unemployed

The Spanish government has finally given in to pressure from leftwing parties in parliament. The financial aid of 420 euros to be paid to all those unemployed whose unemployment benefit has run out will be extended to include those whose benefit ran out from 1st January this year instead of 1st August as established in the law passed on 13th August this year.

This modification to the law will extend the financial help to another 700,000 people and will increase the cost of the measure by 100 million euros a month which is around 700 million more euros than originally forecast. However, a government spokesperson, José Antonio Alonso, said that these calculations are still hypothetical because it is not yet known how many people will apply for the aid although forecasts are based on calculating the total number of people eligible for the aid.

Alonso said that the measure was fair because one of the government’s priorities was to make the state’s resources available to those that most needed help. When asked if the change to the current law was due to lack of support in parliament Alonso explained that the government had consulted all parliamentary groups before passing the law. He also added that the amendment would be passed as quickly as possible so that it would come into effect at the beginning of November.

Yesterday it was announced that so far in 2009 that the government has spent 24.5% more than in the same period for 2008 and that by July the deficit had increased by fivefold and now represented 4.69% of GD