| THE International Monetary Fund (FMI) has called for Spain's government to slow down in its relentless drive to cut its State deficit, saying the country's economy cannot cope with so many cutbacks.
According to managing director of the FMI, Christine Lagarde (pictured), the reductions should focus on those with higher incomes and on sanctioning the autonomous regional governments if they fail to meet their budget targets and run up huge debts.
A slower process of debt-reduction, and adjusting public accounts when Spain's macroeconomic environment is healthier, will help prevent the State economy from collapsing, says the FMI.
Spain needs to improve its crisis and resolution management in its banking sector and create an 'integral communication strategy', to include classifying banks according to the results of independent evaluations and management of their existing assets.
But they support the controversial labour reform recently approved in Parliament, which will effectively make it easier and cheaper for employers to get rid of staff.