March has brought with it more bad news for the domestic property sector in Spain. Nearly six million Spaniards are now out of work and it seems plans to boost employment to stimulate economic activity are failing. According to Phillip Inman, economics correspondent for the Guardian and Observer, and author of Managing Your Debt, a Which? essential guide, current unemployment levels are now reminiscent of the days of Franco. "The country was virtually a feudal, agrarian economy the last time almost six million workers were unemployed," he wrote in the Guardian.

As the country prepares for another recession, this is concerning for the property sector, which needs domestic activity to increase to move distressed assets. While foreign investors are continuing to be active in the country, they are increasingly opting for modern, new developments, opposed to many of the toxic real estate units currently being promoted by Sareb and other financial institutions. This means that the Spanish property market continues to be saturated.

For the government, finding a way out of the crisis could prove difficult and officials have recently come under fire for youth unemployment statistics. Mr Inman explained that the percentage of youngsters out of work now stands at 56.5 per cent and a ceiling does not seem to be in sight. This led to a "barely disguised jibe" from Mario Draghi, head of the European Central Bank, stating that countries that put "all the weight of flexibility" on young people leave themselves vulnerable to problems.

However, it hasn't been all bad news for Spain and there are signs that in other parts of the economy things are looking up. The International Monetary Fund (IMF) has recently declared that financial reforms in the country are on the right track, with the "clean-up of undercapitalised banks" reaching an advanced stage and important reforms either already in place or in the pipeline. What's more, Sareb has been praised by the IMF for receiving the distressed real estate of the weakest banks and finalising service agreements to manage the transfer of assets.



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