To address the problem of very high unemployment, the IMF recommends more decentralised wage setting and the introduction of greater flexibility at the firm level to adapt wages, working hours and employment to the economic situation, which might also be a way forward for Spain. Overcoming the crisis is still an uphill struggle; if you don’t go forwards, you go backwards.
With regard to reforms, governments therefore have to keep the pedal to the metal. However, is it a German central banker’s task to call for structural reforms and budget consolidation in other euro-area countries?