Spain Aims To Pay Jobless Migrants To Return Home

Spain aims to pay jobless migrants to return home

By Mark Mulligan in Madrid and Andrew Bounds in Brussels
Financial Times
Published: June 18 2008 03:00 | Last updated: June 18 2008 03:00

Immigrants in Spain who lose their jobs would be offered lump sum payments to return home as part of a package of planned reforms aimed at softening the impact on the labour market of the country's economic downturn.

Celestino Corbacho, the employment and immigration minister, said yesterday he hoped the incentive would attract an initial “15 or 20” per cent of the 100,000 foreign workers who currently qualify. The measures are directed mainly at low-skilled workers from Latin America and northern Africa.

Under the proposed scheme, legal immigrants from outside the European Union who became jobless would be offered 40 per cent of their unemployment entitlement on renouncing their residency and work permits.

The rest would be paid once the person was back in his or her country of origin. A typical pay-out for an immigrant worker with six years' legal service and no children would be about 20,000 ($31,000, 15,800).

The Spanish plan comes in response to a sharp downturn in economic activity after more than a decade of robust growth. Annual growth in gross domestic product is expected to slow to less than 2 per cent this year, from almost 4 per cent in 2007.

The slowdown has been most dramatic in the construction sector, which accounted for 30 per cent of jobs created in 2005 and 2006. Rising interest rates, over-supply and tougher lending conditions mean new home starts this year are forecast at less than a quarter of their 2006 peak of 800,000.

Unemployment among non-Spanish workers surged 24 per cent in the first quarter this year.

Officially, about 15 per cent of the immigrant community's active population is out of work, compared with a national average of 9.6 per cent. Immigrant associations say the figure is probably more than 20 per cent after accounting for illegal workers.

There are fears that this trend could stoke social conflict in a country that has absorbed at least 4m immigrants in the last decade with relatively little fuss.

Spain's move comes as the EU is expected to agree minimum rules for the deportation of immigrants who outstay their visas or have asylum claims rejected. The European parliament should back the so-called returns directive today.

It says voluntary return is the ideal solution but allows forced deportation.