Unemployment in Spain Hits 17.4%

The number of unemployed people in Spain rose to a record four million in the first quarter as the economy continued to shed jobs created over the last decade by inexpensive credit and a real estate bubble.
he Spanish unemployment rate climbed to 17.4 percent, from 13.9 percent in the final quarter of 2008, or more than twice the EU average, the National Statistics Institute said Friday. The 802,800 increase in the ranks of the jobless was the largest quarterly increase in more than 30 years.
The Bank of Spain has warned of little room for additional spending, with Spain’s public sector deficit on track to hit 8.3 percent of G.D.P. this year and its ratio of debt-to-G.D.P. set to reach 50 percent. The bank’s governor, Miguel Fernández Ordóñez has said that the social security system could go into deficit this year.
New York Times

Nationalists sweep to victory in northern Cyprus poll

Efforts to reunify the divided island of Cyprus could be complicated by an election result in the breakaway north. Turkish Cypriot nationalists have been celebrating a decisive victory in the parliamentary poll.
Their National Unity Party, led by Dervis Eroglu, has pledged to pursue talks aimed at finding a settlement. But it has advocated an outright two-state solution to the Cyprus question. And that is at odds with the federal model being discussed in peace talks that Turkish Cypriot leader Mehmet Ali Talat launched with Greek Cypriots last year.
He retains his position despite the outcome of Sunday’s vote. But his room for manoeuvre in trying to reunite the island could be limited, with his political rivals now dominant in the territory’s parliament. The internationally-recognized Greek Cypriot government in the south represents Cyprus in the European Union. Only Turkey recognises the Turkish Cypriot territory. And, as long as the island remains divided, Greek Cypriots say they will block Turkey’s admission to the EU.
Euronews.net

Hungary's economy to shrink by up to 6 pct in 2009

Hungary's new prime minister said Sunday that the country's economy would contract by as much as 6 percent this year, making new budget cutbacks and reforms necessary to keep the state budget in balance. Prime Minister Gordon Bajnai said that if the government's planned reforms and austerity measures were not introduced soon, Hungary could face a prolonged economic crisis.
A heavy reliance on foreign investors to finance the state budget, a large proportion of home- and car owners with debts in foreign currencies, especially the Swiss franc and the euro, and an engorged welfare system have made Hungary among the countries in Eastern Europe most affected the global economic slump.
Bajnai was sworn in Tuesday after parliament elected him to replace Ferenc Gyurcsany, who resigned last month amid Hungary's deepest crisis since the end of communism nearly 20 years ago. Bajnai said he was taking the job at most until elections are held in April or May 2010 and would not seek to run again for office.
While the last official forecast expected gross domestic product to fall by as much as 3.5 percent, Bajnai said the depth of the global economic crisis was having increased effects on Hungary, which relies heavily on markets like Germany for its exports. Bajnai said it was time for all Hungarians to "cry together and laugh together," by, for example, expanding the tax base and increasing the proportion of those working as opposed to living on social welfare.
Bajnai said that among the decisions taken by the Cabinet were to lower payroll taxes to first preserve jobs and later hopefully increase the number of workplaces, raise the value-added tax to 25 percent from 20 percent, and temporarily eliminate extra pension payments and automatic annual bonuses for public employees.
He also announced plans to raise the retirement age gradually to 65 from 62, freeze some social welfare payments, eliminate energy subsidies for homeowners, introduce a real estate tax burdening especially the more valuable properties, lower expenditures on state-owned media, reform and cut subsidies for agricultural producers and simply the tax code.
The government also was planning to expand the personal income tax brackets so that around 90 percent of taxpayers would fall into the lowest category, the prime minister announced. Bajnai said his "crisis-management" government's aim was to help Hungary soon reach an annual growth rate 2 percentage points above the European Union average and meet the economic criteria needed to change the currency from the forint to the euro.
AP

Moldova accuses Romania of staging riots

Moldovan president Vladimir Voronin has blamed EU neighbour Romania for staging post-election riots and announced he would expel Bucharest's ambassador and reintroduce visas for Romanians. Some 2,000 protesters were gathering for the third day on Wednesday (8 April) in Chisinau, after police took over the control of the parliament and presidential palace a night before.
Mr Voronin decided to expel the Romanian ambassador and reintroduce mandatory visas for his neighbours, despite a visa facilitation agreement with the EU. Under the agreement, Chisinau lifted visas for all EU member states at the end of 2007, including for the EU's newest members Romania and Bulgaria. Moldovan authorities also interrupted the broadcasting of Romanian TV channels on cable networks, which were the only ones reporting live on the events.
Russian support for the current government
Russian interests are still very much present, as the separatist region of Transnistria, in Moldova's eastern part bordering Ukraine, is home to some 2,000 Russian troops and military equipment. Russia's foreign ministry, in a statement on Wednesday, said the riots were a plot aimed at undermining Moldova's sovereignty and pointed the finger to forces which favour a reunion with Romania. Russian President Dmitry Medvedev, who had earlier congratulated Mr Voronin on his party's election win, called for a speedy and calm resolution of the crisis.
Some representatives of Moldovan civil society were disappointed at the EU's reaction and the OSCE judgement that the Sunday elections were free and fair.
"The declarations of OSCE observers and EU officials calling the elections fair proved that the EU feels nausea about the Republic of Moldova. These statements untied the hands of the Voronin regime," Oazu Nantoi from the Institute for Public Policy, a Chisinau-based think-tank, told EUobserver. He said that the elections were grossly manipulated by the state institutions, who only serve the Communist party and its leader. Mr Nantoi, who participated in the demonstrations from the first day on, said that on Monday, people gathered spontaneously, protesting peacefully about the Communist leadership.
Euobserver