More grim economic news piled up today for Spain's ruling Socialists just hours before the launch of campaigning for a November 20 election expected to remove them from power.
Officially, the political campaign starts after the stroke of midnight. But unofficially, most people agree the economic crisis has already defeated the Socialists, widely expected to be removed after eight years in power and replaced by the conservative Popular Party.
Latest government data showed employment - at the heart of the election battle - deteriorating further with the number of jobless growing by 134,182 to 4.36 million in October.
Spain last week posted a 21.52% unemployment rate in the third quarter, the highest in the industrialised world.
The country also had to pay out sharply higher borrowing rates to raise €4.49 billion in a government bond auction today, a reminder that investors still see Spain's sovereign debt as a risk.
The Spanish economy slumped into recession during the second half of 2008 as the global financial meltdown compounded the collapse of a property bubble, which threw millions out of work.
Spain has promised to reduce its annual public deficit from the equivalent of 9.3% of gross domestic product last year to 6% of GDP this year, 4.4% in 2012 and 3% in 2013. This year the government completed a restructuring of the financial sector and it joined with the opposition to enshrine balanced budgets in the constitution.
Last year, it raised sales taxes, froze old-age pensions, increased the retirement age, cut public workers' wages by five percent, and made it slightly less costly for firms to hire and fire.
The three major credit rating agencies, Moody's Investors Service, Standard & Poor's and Fitch Rating, all downgraded Spain's sovereign debt last month. They warned that high public and private debt levels coupled with the weak economy made the country especially vulnerable to the euro zone debt crisis.
