Further Fiscal Adjustment and Reforms from Spain
January 16th, 2012
European Commission Vice-President and Head of Economic Affairs, Olli Rehn, described the measures taken by the new government of Mariano Rajoy to cut the deficit as “very important”, but called for more fiscal adjustment and structural reforms, especially in the labour market, to ensure compliance with the objectives agreed with the EU.
“We encourage Spain to take action both on the fiscal, as well as on the structural front,” Rehn stressed at a press conference on Thursday, Cinco Dias reported.
“We hope that Spain will take further measures, especially in terms of reforms, and above all in the labour market, because unemployment of about 20% and youth unemployment of around 40% are an extremely serious concern, economically as well as politically and humanly”, said the Head of Economic Affairs.
Rehn dismissed as “regrettable” the fact that Spain has “substantially” exceeded their deficit target for 2011 (reaching about 8% instead of the 6% they committed to) and said that this deviation is due “mainly to the excessive squandering of funds by regional governments.”
“It is essential, therefore, that the new Spanish Government take very important decisions (referring to those of 30th December) to curb the deficit in 2012, and return to a sustainable path to enable the country to meet, as far as possible, their objective of 3% in 2013,” said the European Commission Vice President, who has nevertheless made it clear that these measures are still insufficient.
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