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Breakingviews: The bad smell of Spain's wage cuts

Friday, November 15, 2013 - 04:26

Nov. 15 - Rubbish piles up in Madrid as cleaners protest 40% wage cuts and layoffs. Spain might need to shrink sky-high unemployment, but brutal wage cuts aren't a miracle cure, says Breakingviews.

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That's rubbish continues to -- on Madrid's streets brains wage cops is starting to smell -- is breaking news and it's a -- Finds hidden treasure trove of bank capital and tax Pia you know -- -- European -- And is with us to shed some lights on -- that's always sprain. -- wage cuts low wages yes it would encourage companies to -- it would eventually boost. Consumption. Exports. A government revenue. -- but in the short term. Well the -- reasoning looks very painful right well he's having ninety took about them that the strike of trust critics in the -- -- -- on strike because they -- being out on public lay offs to accept 40%. Forty went zero for 0%. We -- talking like slow adjustment on the inflation because interest and so wrote that. Or being good companion to competitive we're talking major. Big time Ben tightenings and this has gone for two years now the question is how much more -- -- can take. The reasoning behind of course he's you know labor costs and a company's -- who to hire more. And -- mentioned but is short term it depresses demand domestic demand and so it's. Wouldn't be. Hence hence the problem that austerity -- consuming countries in Southern Europe and elsewhere France and others. -- in the Netherlands supposedly -- country. When you are at the moment when you beginning to wonder especially as the economy -- times picking up a little debate. How much -- and they technique and this is a very worrying question. Fortunately for spring as a war correspondent here and -- comparable. Out insists that all the ways and pickets. By themselves will not solve the country's problem he's doing what -- 26%. Unemployment rate 26%. Unemployment rate. This won't be achieved it and fight that to us by cutting wages to house the user. Well you have -- first let it labor reform. You have other areas where they can to have margins for improvement. Whole range of reforms without more structural than complete and cutting wages brutally. Okay the yellow the story wanna look at as his new Mike's story on dom. It's it's -- -- sorry and he makes it right hit it years and central banks -- usually agencies of the states. I'm in Italy and I believe in and a couple of other countries Belgium increase right. Very -- listed they are doomed when Benjamin Brees then listen and it doesn't present its conservative Italy that I've met that test shareholders -- It's the bank of Italy -- would would dare suggest that an accurate and hasn't been independent. Right ahead but but but this creates a huge opportunity what -- states. -- but most of the banks well -- -- to do with the purpose of listening to who pushes -- to really value. Basically in their books that holding without being kind to him that historic. That would be much more -- that. Although it's very hard to put the value per seat on the bank of Italy and it's I mean you can you can do that they pay out dividends to banks weakened -- Probably big country and try to -- funds that. Consider the Woody's World Series since the banks would we value their holdings. From. -- series event that dedication from back. And the government collects is taxes on the re arguing balls that get under the re evaluate a straight news closer to tax grab by the -- So -- -- is convenient. Which in effect is what I think if you will with Satan accounting trick to not -- telling banks to. Present have more capital. And the Italian treasury to get him -- Monday ahead of us justice and sensitive topics aren't perfect timing winter winds about yes exactly. All right well let's do that was -- such hotspots in this you have many things about. Yeah now so I don't know what's our US senate everyday talk and east in 1730 GMT. How much trouble this is what is.

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Breakingviews: The bad smell of Spain's wage cuts

Friday, November 15, 2013 - 04:26

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