PARIS Feb 4 Spanish Prime Minister Jose Luis
Rodriguez Zapatero is facing a difficult situation over pension
reform but Spain needs to make an effort to help its economy out
of the financial crisis, the head of the IMF said on Thursday.
Zapatero's government backtracked on a new pension reform
plan on Wednesday after an outcry from labour unions and media.
The government officially withdrew a paragraph from
austerity proposals sent to the European Commission and
distributed to media, saying it "was misleading".
The eliminated paragraph had suggested increasing the number
of years Spaniards would have to pay into a pension plan to 25
years from 15 years. Spanish media websites immediately made it
their lead story and unions reacted with fury.
"I understand Zapatero's situation. It is very difficult.
The crisis in Spain is very deep, notably because of the
property situation," International Monetary Fund Managing
Director Dominique Strauss-Kahn told France's RTL radio.
"But the Spanish really need to make a considerable effort."
Strauss-Kahn said no country should be under the illusion
that it was possible to escape the ongoing financial crisis
without paying the cost.
(Reporting by Anna Willard; Editing by Mike Peacock)