SPAIN’S new government is learning to be wary of microphones. Mariano Rajoy, the prime minister, was caught by one claiming his labour reform would provoke strikes. Luis de Guindos, the economy minister, was overheard calling it extremely aggressive. When the reform was unveiled in a decree of February 10th, expectations were of a radical simplification of Spain’s rigid labour laws, which help keep unemployment at 23% (and youth unemployment at 47%).
This third reform in two years is a ragbag of measures. Among them are changes that hand recession-hit Spain a tool for survival inside the euro: internal devaluation. “The average salary will go down. That will improve competitiveness and the chances of exporting, eventually creating more jobs,” says José Ramón Pin of the IESE business school.
via Labour reform in Spain: Spanish practices | The Economist.
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