Spanish town struggles with 75 per cent unemployment

On the outskirts of this town of white-washed houses in southwestern Spain, dozens of warehouses where bricks, marble and other building materials were once produced lie idle since a decade-long economic boom came to an abrupt end last year.

During the height of the country's credit-fuelled property boom the dozens of small and medium-sized building firms which sprang up in La Lantejuela employed up to 80 per cent of the town's workers as local residents abandoned farm work for more lucrative jobs in construction.

But those jobs began to quickly disappear last year as the global credit crunch exacerbated a slowdown that was already underway in Spain's real estate sector.

Today nearly 75 per cent of the town's economically active population is jobless, one of the highest unemployment rates in Spain, which in turn is the nation with the highest jobless rate in the 27-nation EU.

Spain's unemployment rate hit 14.8 per cent in January after the impact of the collapse in the building sector spread to other areas, and many economists predict it will continue to rise to hit 20 per cent next year.

Between the end of 2007 and the end of last year the number of unemployed in La Lantejuela jumped by 132 per cent, according to mayor Juan Vega.

"This is not viable," he said, adding he felt "powerless" before the dozens of struggling local residents who file through his office every day to ask for help.

"They have gone into debt to build a house, buy a car. Today they cannot pay back the loans and the companies are threatening to cut off their water and electricity," said Mr Vega, who belongs to the United Left coalition.

Just a decade ago most workers in the town of some 3,800 people nestled in the Andalucian countryside between Seville and Cordoba had jobs as farm labourers. "But once the construction sector had its boom, everyone raced towards this more lucrative sector," he said.

The town's decline is a microcosm of the situation throughout Spain, where the bubble burst on the property market last year and battered the nation's economy.

To draw attention to the plight of La Lantejuela, the mayor of the town locked himself in his office for 24 hours last month, an act which got national media coverage.

"What saves us is family solidarity. Many couples with children have already returned to live with their parents or they go eat at their parents' house several times a week," said Mr Vega.

With no job since August, mortgage payments to make and a teenage daughter to raise, Jose Andujar Martin said he had no choice but to return to the farm work that he left four years ago for higher-paying work in construction.

"Even if I have no desire to do it, I will certainly go back to picking strawberries, as I did for 10 years," Martin, 48, said as he sat at the counter at one of the town's bars before a bottle of beer.

Faced with a sharp decline in demand, Antonio Moreno is struggling to keep his aluminium siding plant, which employed 20 people as recently as last year, alive.

"In a few months orders dropped, clients stopped paying, I had to let my employees go and I only work now with my two children," the 59-year-old said.

The government's response to Spain's first recession in 15 years has been an €11billion spending plan which aims to create more than 300,000 jobs, mainly through 31,000 public works projects across the country.

The town of La Lantejuela will receive €672,000 from this fund.

"But that is enough to provide work for three days for each of the 1,022 job seekers in the town," remarked Mr Vega.