The latest annual report on Spain published by the International Monetary Fund (IMF) met varying reactions in April 1999. Employers' associations and the Spanish government have expressed their satisfaction with its recommendations, though the trade unions have criticised their "neo-liberal" character.
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The latest annual report on Spain published by the International Monetary Fund (IMF) met varying reactions in April 1999. Employers' associations and the Spanish government have expressed their satisfaction with its recommendations, though the trade unions have criticised their "neo-liberal" character.
The Spanish government is very satisfied with the most recent annual report on Spain published by the International Monetary Fund (IMF), although the report recommends a series of tough measures aimed at bringing Spanish income per capita closer to the European average and reducing unemployment.
The IMF's forecasts for economic growth and inflation are not as positive as the official government forecasts. The IMF suggests that the authorities should take further steps to reduce public spending, and insists on the need to reduce the number of civil servants, cut health expenditure and increase discipline over social expenditure.
Regarding employment, the IMF specifies the need to reduce the current unemployment level of 18% to single figures and to reduce temporary employment. To achieve this objective, the IMF (as in previous years - ES9712237N) recommends reducing the cost of dismissal. In particular, it suggests clarifying the reasons for fair dismissal, reducing compensation for unfair dismissal and placing the burden for demonstrating unfair dismissal on the worker. It makes further recommendations with the same objective, such as reducing the amount and duration of unemployment benefit and decentralising collective bargaining.
The IMF also maintains that it is essential to cut the social security contributions of companies in order to guarantee the competitiveness of the Spanish economy, which involves reforming the pension system to ensure its sustainability for an ageing population. According to the IMF, these reforms would have to guarantee an increasing significance for private pensions systems and a gradual increase in the retirement age.
The Spanish government and employers' associations have expressed their satisfaction with the IMF report, but the trade unions have severely criticised the "neo-liberal" character of its recommendations. The UGT and CC.OO union confederations believe that the IMF has merely applied remedies derived from neo-liberal doctrine. Its recommendations, they claim, are aimed only at improving macroeconomic indicators, but they do not help to solve problems such as unemployment and are socially regressive. The most sharply criticised point was the recommendation to reduce the cost of dismissal. The trade unions do not share the opinion of the IMF that this is the main cause of the high rates of unemployment and temporary employment in Spain. In their opinion, the IMF in making this proposal does not really intend to improve the efficiency of the labour market but rather to reduce the importance of collective bargaining.
Eurofound recommends citing this publication in the following way.
Eurofound (1999), Reactions to IMF annual report on Spain, article.
