The Spanish labor minister – Celestino Corbacho said that Spain’s economic recovery is going to be achieved by focusing on cutting down on government spending. This way, the massive deficit can be overcome rather quickly.
“If we cut pensions, salaries and withdraw all modes of public investment then it is evidently going to affect the economy, but in Spain’s case, at least the country will not slide down to recession” – said Corbacho.
Currently Europe is shifting focus towards cutting deficits from stimulating growth patterns. Spain is serving as a weak region towards a generalized recovery. “In the near future, Spain’s luck is going to go hand in hand with the rest of the European countries” – said Corbacho. The Spanish economy just recovered from a 1.5 year recession and it is being feared that the spending cuts policy will thrust the economy back to where it was before.
Presently, Spain has a 20% unemployment rate that is no doubt the highest in the Euro zone. The country is going to start on the net creation of jobs as early as the beginning of year 2011, while the economy slowly picks up a pace.
In related news, an overhaul of the Spanish labor laws was decreed by the government, to stimulate employment prospects for youth and to make it easy for firms to cut down on worker hours during tough times.
Though Corbacho doesn’t expect any head spinning changes. He said that the necessary amendments will be passing through the parliament by September 2010. The new reforms offer incentives to companies for hiring people who have been unemployed for a long time, and fall under or above 30-year age.