Sunday, May 30, 2010

Spain - IMF steps up pressure $STD

Spain - IMF steps up pressure - “Spain’s economy needs far-reaching and comprehensive reforms. The
challenges are severe: a dysfunctional labor market, the deflating property bubble, a large fiscal deficit,
heavy private sector and external indebtedness, anemic productivity growth, weak competitiveness, and a
banking sector with pockets of weakness. Ambitious fiscal consolidation is underway, recently reinforced
and front-loaded. This needs to be complemented with growth-enhancing structural reforms, building on the
progress made on product markets and the housing sector, especially overhauling the labor market. A bold
pension reform, along the lines proposed by the government, should be quickly adopted. Consolidation and
reform of the banking system needs to be accelerated. Such a comprehensive strategy would be helped by
broad political and social support, and time is of the essence.” WSJ

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