Bank Of Spain's Ordonez Says Labor Reforms Are A Necessity

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Bank of Spain Governor Miguel Angel Fernandez Ordonez said on Wednesday that labor reform and a credible fiscal consolidation policy were imperative to repair Spain's battered economy.

Speaking at a conference organized by KPMG in Madrid, Ordonez called on the people to accept the government's fiscal consolidation measures and warned that a failure to act now would damage the credibilty of the country.

The central bank chief urged the government to implement its reform plans with "concrete and ambitious measures that bring profound changes in our labor market".

"If we don't adopt an ambitious labor-market reform, the Spanish economy will enter a tough and complex period," Fernandez Ordonez said.

The comments come as thousands of workers protested in Spain's major cities against government spending cuts and plans to raise the retirement age by two years to 67.

Demonstrations took place in Madrid, Barcelona and Valencia in protest of Prime Minister Jose Luis Rodriguez Zapatero's EUR 50 billion spending cut plans and a civil service hiring freeze.

Spain has the largest unemploment rate in the eurozone at 19.5%, with some 44.5% of under 25s without a job.

Bank of Spain Governor Miguel Angel Fernandez Ordonez said on Wednesday that labor reform and a credible fiscal consolidation policy were imperative to repair Spain's battered economy. (Market News Provided by RTTNews)