STOCK MARKET WATCH -- Friday, 29 June 2012

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67. Rajoy warns of “difficult” reforms still to come

http://elpais.com/elpais/2012/06/25/inenglish/1340644089_852369.html

Prime Minister Mariano Rajoy announced on Monday that more economic reforms are to come, but did not go into any further detail. Speaking at a meeting of the country’s largest employers association, the CEOE, he said that these reforms would be “difficult” and would arrive “soon, before the end of the year.” He also said that the government was willing to “correct what needs to be corrected and reform what needs reforming.”

During his speech, Rajoy called for decisions to be taken by European Union countries on the measures that are necessary to save the euro and deal with the banking and sovereign debt crisis. “The political message must be emphatic and the calendar for integration needs to be clear,” he said, after stating that one of his objectives was the creation of “a joint European agency for debt and issues.” In other words, eurobonds.

Before speaking at the meeting, the head of the CEOE, Juan Rosell, took the floor. The business leader used the opportunity to call on the government to go even further than it already has with reforms to the labor market. A wide-ranging change to the laws — which, among other things, has made the cost to businesses of sacking employees cheaper — will be signed off by Congress this week.

Rosell used the example of Germany, where Chancellor Schröder carried out labor reforms in four phases between 2002 and 2005.