German jobless queues are getting shorter

Both saw unemployment rates drop from double-digit figures: Germany's unemployment rate fell from 10% to 9.6% and Spain's to 9.9% from 10%.

In both the EU at large and in the smaller eurozone, the unemployment rate fell to 8.8% in May from 8.9% in April.

In the 25 EU member states there were 19.1 million job seekers, 12.8 million of them in the eurozone.

Unemployment rates are high when compared with the US, where the unemployment rate is 5.1%, and Japan, where the rate is 4.4%.

And in Europe's two biggest economies, Germany and France, high unemployment has become a political issue.

Lengthy battle

Friday's data follows a report released earlier this week, which showed German business confidence had improved for the first time in five months.

Schroeder loses confidence vote

The recent fall in the euro sparked fresh optimism among German firms.

Chancellor Gerhard Schroeder's proposed economic reforms have however met with much resistance, where unemployment hit its highest level since the 1930s earlier this year.

On Friday, Mr Schroeder lost a confidence vote in parliament, paving the way for its dissolution and early elections, as he wanted.

"If we are to continue with this agenda, legitimacy through new elections is required," Mr Schroeder said.

In neighbouring France, where the unemployment rate it at a five-year peak of 10.2%, Prime Minister Dominique de Villepin has made the battle against unemployment a priority.