Rehn asked the Spanish government to continue implementing labor reforms and emphasized that a rejection to carry out a reduction of salaries by at least 10% would result in high costs in both social and human terms, and would be especially damaging for the unemployed youth.
Meanwhile, the pay cut would help boost hiring and lower inflation, stimulating consumption. Rehn suggested that in this respect Spain should follow the example of Ireland and Latvia.
Rehn's opinion is supported by the IMF, which asked Spain last week for an agreement between trade unions and employers on a salary reduction by 10%.
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