According to a report by IMF, Spanish unemployment needs to be addressed with pro-job policies.
On 19 June, James Daniel, the IMF mission chief for Spain welcomed the reforms made by the Spanish government for stabilising its economy, saying that the country will start growing again at the end of this year.
However Daniel stressed that the Spanish unemployment rate is “unacceptably high and the outlook difficult.” More importantly, even if the Spanish economy starts to grow, there is no certainty that employment rates will increase too. “The uncertainty is whether the recovery will be strong enough to generate jobs,” the IMF official said.
Even though the country narrowly avoided taking an international bailout, it did receive permission last year from a European-funded program to tap as much as €100 billion to save its bankrupt banks.
The IMF welcomed the Spanish governmental economic policies, which cut public spending in education and national health care, as according to IMF Spain regained its financial stability.
Spanish unemployment rate is the second highest in Eurozone behind Greece. According to the Associated Press (AP), many young and highly educated Spaniards have emigrated in recent years with top destinations being Britain, Germany and Latin America.
The solution for IMF in order to boost Spanish employment is to lower the wages, and de-regulate further the industrial relations, in order to be easier for firms to hire. Daniel said, “Spain needs to generate jobs and that probably means more flexibility on wages going forward.”
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