'Spain's record wage cuts not enough': IMF

Alex Dunham
Alex Dunham - [email protected] • 30 Jan, 2014 Updated Thu 30 Jan 2014 11:24 CEST
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The International Monetary Fund has asked Spain to further reduce salaries even though it has already slashed average wages by 20 percent over the past two years - the fastest drop in the country's democratic history.


The International Monetary Fund has revised up its 2014 growth forecast for Spain to 0.6 percent, or more than triple the figure it forecast in October last year, but this is still very modest and it continues to expect more.

The monetary body claims the 20 percent drop in average wages over the past two years does not make up for the excessive salary increases seen prior to that, a factor which they claim has contributed to Spain’s ailing unemployment rate.

Although the organization headed by Christine Lagarde has praised Spain's labour reforms, they will continue to push Spain to adopt further measures that guarantee the changes are "implemented" and “tested".

The IMF already called for Spain to cut its wages by 10 percent in August 2013 as a means of stimulating growth and creating more jobs.

Spanish online daily El Plural has run the story under the title "Spain already has 'low cost' Asian-style salaries" and highlighted the fact that a French worker earns on average 14 percent more than a Spanish one.

The political news website also underlines the fact that the IMF has ignored a recent study carried out by UK charity Oxfam showing how the wealth gap in Spain has widened since the beginning of the crisis.

The 20 richest people in Spain earn as much as the poorest 20 percent, the report states.



Alex Dunham 2014/01/30 11:24

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