New data knocks Spain's status as the rising star of the euro zone, with unemployment ticking up and inflation nudging down. As Ivor Bennett reports, it's a reminder of deep-seated problems as voters prepare for a second parliamentary election in six months.
Spain is supposed to be the happy face of Europe's recovery. but try finding a smile here. Many of these people have been queuing at job centres since 2010. And with the country now entering its fifth month of political deadlock, unemployment has only got worse. Rising in the first quarter to 21 percent. (SOUNDBITE) (Spanish) ELIANA DIAZ ROSALES, 49, CLEANER, JOBLESS SINCE 2011, SAYING: "Right now with all this fighting - that they can't agree, that we go to elections, that we don't, that they will form a coalition - how are the people? Not well. Everything is bad." (SOUNDBITE) (Spanish) JOSEFINA, 64, CARE WORKER, JOBLESS SINCE 2010, SAYING: "This affects me and angers me, because they don't think about us, the unemployed people. They only think about themselves" Behind Greece, Spain has the second highest unemployment rate in Europe. With close to 4.8 million out of work. The job market had been showing signs of growth, but mostly producing short-term contracts. And without a government, it's only likely to get worse. SOUNDBITE (English) IHS GLOBAL INSIGHT, DIRECTOR OF SOVEREIGN RISK ANALYSIS, JAN RANDOLPH, SAYING: "Economies can hum along quite nicely without a government. We saw that in Poland in the 1990s, we saw it in Belgium, without a government for nearly a year. But the problem is that there still needs to be reform for Spain and we need a government to execute on reform." Another election is now expected in June after the main parties gave up forming a coalition earlier this week. Should there be a victor, they'll have more to fix than jobs. Inflation sinking further into negative territory this month to minus 1.2 percent.