IMF chief says Spain’s crisis ‘not cured’ yet

OLIVIER BLANCHARD, Harvard and MIT professor and the IMF’s chief economist since 2008, has both criticised and praised Spain’s performance as it emerges from financial crisis but on the whole says its recovery “is not a success story.” 

Speaking from his office in Amiens, France, Blanchard remarked that Spain’s high levels of unemployment have still not been addressed effectively.

When asked whether he thought that, despite Spain’s high unemployment levels, it had nonetheless come out of recession, he responded: “Can you say that a country has successfully emerged from recession when it still has 23 per cent unemployment?

“Competitiveness and exports have certainly improved and are getting stronger, behaving reasonably well. They are very good news compared to a year ago and can continue.”  

He went on: “How do you define crisis? The country has been left in growth but unemployment is too high. Therefore Spain is not cured. Unemployment can only go down through reform. 

“For me, the key is the duality of the labour market and the need to remove large differences between temporary and permanent workers. Spain should not be living with 10 per cent or 15 per cent – or 23 per cent unemployment.”