The number of unemployed Spaniards last month rose above 4 million for the first time in the country's history, official figures revealed yesterday, underlining the scale of its economic collapse.

The Spanish government said that 125,000 people registered as unemployed last month, taking the jobless total to 4.05 million, or around 17.5 per cent of the working population.

Spain is the only major Western economy that has yet to emerge from recession, with a collapse in its construction industry having spread quickly to manufacturing and services.

By contrast, German has around 3.6 million unemployed people, despite having a population that is twice the size of Spain's.

Within Spain, there is also widespread cynicism about the government's figures. The National Statistics Institute said last week that Spanish unemployment had reached 4.3 million, equivalent to a joblessness rate of 18.8 per cent.

But the country's trade unions put the true figure at almost 4.5 million, representing almost 20 per cent of those who are available to work. Maravillas Rojo, the government's employment secretary general, attempted to put a brave face on the figures yesterday, insisting that the rate at which unemployment is increasing in Spain is now beginning to slow.

"January is a bad month for unemployment," she said.

"Historically, it rises in that month, even when the economy is growing."

Even so, the Spanish government's own projections are for unemployment to rise above 20 per cent this year, before beginning to decline. Its own efforts to stimulate the economy and create jobs will also be hindered by the promises it has made to begin tackling Spain's national debt. It has pledged to get the budget deficit down to 3 per cent of GDP by 2013, from 11.4 per cent last year. That equates to spending cuts of around €50m (NZ$98.3m).

Nevertheless, Spain's Prime Minister, Jose Luis Rodriguez Zapatero, has promised new policies to tackle joblessness.

Ms Rojo said yesterday that Mr Zapatero was "aware that the situation demands new measures" and said he would "present proposals" at a meeting with unions and business leaders.

- INDEPENDENT