7 Aug 2013
Rehn urges Spain to reduce salaries
FXstreet.com (Barcelona) - European Commissioner for Economic and Monetary Affairs Olli Rehn said in an article published on his blog that Spain should reduce salaries by 10%, as the International Monetary Fund suggested last week.
Rehn asked the Spanish government to continue implementing labor reforms and emphasized that a rejection to carry out a reduction of salaries by at least 10% would result in high costs in both social and human terms, and would be especially damaging for the unemployed youth.
Meanwhile, the pay cut would help boost hiring and lower inflation, stimulating consumption. Rehn suggested that in this respect Spain should follow the example of Ireland and Latvia.
Rehn's opinion is supported by the IMF, which asked Spain last week for an agreement between trade unions and employers on a salary reduction by 10%.
Rehn asked the Spanish government to continue implementing labor reforms and emphasized that a rejection to carry out a reduction of salaries by at least 10% would result in high costs in both social and human terms, and would be especially damaging for the unemployed youth.
Meanwhile, the pay cut would help boost hiring and lower inflation, stimulating consumption. Rehn suggested that in this respect Spain should follow the example of Ireland and Latvia.
Rehn's opinion is supported by the IMF, which asked Spain last week for an agreement between trade unions and employers on a salary reduction by 10%.