The IMF is urgent to the Executive to lower the price of the dismissal
Double lime kettle for the Spanish economy. To the technicians of the Mission of the IMF, who finish visiting Spain, twelve days have been enough them to assess the damage of the imminent recession. According to its forecasts, the GIP will back down in 2009, “at least, a 1%”, and so it reviews his previous prognosis (- 0.7%). While, and with the patient within house, the Government resists to trim his forecasts and maintains that the economy will advance a 1%, the next year. The report of the IMF, disclosed yesterday, confirms the alarms untied by twelve of the thirteen services of more important private studies of the country, consulted by Funcas, that from November indicates that the GIP will collapse a 0.9%. Economy has announced that will modify its macroeconomic picture before the year finishes. But the IMF takes a step further on. According to the organism, the indicating ones already suggest “a end of 2008 devastating one”. From this perspective, it explains that the confidence could improve “if an ample strategy were defined better than it bound the fiscal support to the structural reforms”. In fact, it aims that the main one beats of the measures adopted so far is that “structural reforms have not been used to increase the growth potential”. The pull of ears of the institution is forceful. It notices that if deeper reforms are not approved, “the growth runs the risk of being weak during a prolonged period of time”. Thus, echo becomes of which they are the workers who are paying the crisis, because the labor market is adjusting by “amounts” (uses), instead of by prices. Spain needs one “prolonged and important wage moderation”, vertebrate through three axes: to eliminate the twinning between wages and IPC that, according to the IMF, has contributed to the growth of the inflation over the EU; to popularize the clauses of offs-hook, relegated to the enterprise bankruptcies; finally, the dismissal costs must be even at a low level to harness the hiring. The institution explains that a high private indebtedness and a low external competitiveness lead to “long adjustments”, impossible to avoid, now Spain no longer can devaluate the currency to readjust the relative prices. The challenge happens to reduce the costs and to improve the productivity. With the sector of the construction in the heat of correction, the IMF points that the construction of Houses of Official Protection - a mine for new uses, according to the Government is not an adapted policy, when it is a “distorted market and little it is transparent”; that is to say, the benefits not always arrive at those who it would have. He would be more effective, according to the IMF, to harness the rent that, in addition, allows to absorb the houses empty and facilitates labor mobility. The positive note comes from hand of the banking sector, in one more a situation hard than the rest of the EU. The institution does not discard consolidation processes for which it asks that there are “no political interferences” Vegara not yet sees clear that the GIP decreases in 2009 “To say that the growth of 2009 will be negative would be to give too many details”. This was the undecided forecast that the Secretary of State of Economy sent yesterday, David Vegara, that recognized that the situation is “extremely difficult”. Also, it explained that the margin to adopt new measures has been run out, although clarified next that in volatile situations “the things can change”. Also, it assured that one is not going away to reach “absolutely” deflation. On the other hand, Cristóbal Montoro, the spokesman of economy of the PP, loaded hard against the socialist Government remembering who to confront the crisis and unemployment with cost and public investment contradicts the economic theory. Montoro criticized that “the Executive always reacts with more public cost, which aggravates the situation”. “They are the SMEs those that are paying the bad data”, it riveted. (The extracted News of Expansion)
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