It is key because it will permit the clean-up of the banks requiring State aid to be completed and will provide a suitable horizon for the management and sale of the mass of assets to be transferred. Conclusions The Budget for 2013 involves a considerable drive in respect of fiscal adjustment. It attempts to bring about a correction in the primary deficit, net of interest on public debt of almost 2.5 pp of GDP. In the depth of a recession, that is very difficult, but necessary in order to meet the targets to which Spain is committed within the framework of the European Union and the euro area. We have some data which, although not warranting excessive optimism, do indicate that an adjustment is being achieved. We are going to end 2012 with a current account almost in balance, and in 2013 it will probably run a surplus. The recession has a contributing factor, but not the only one. We also have a clear improvement in competitiveness based on changes in our labour costs and in productivity. The most pressing problem facing the Spanish economy is to restore market confidence. There is no other way to achieve this than meeting the fiscal consolidation targets, completing the clean-up and restructuring of our banking system, continuing with the process of private and public deleveraging and moving ahead with the reforms undertaken to improve our competitiveness.
In turn, job creation and growth are essential ingredients for progress on fiscal consolidation. Accordingly, economic policy-making should continue to be structured around two main goals: promoting competitiveness and growth, and restoring the sustainability of public finances. I shall briefly refer to these two major issues before analysing the Budget for 2013. Competitiveness and employment First, let us look at developments in employment and competitiveness, two closely interconnected problems. In terms of economy-wide unit labour costs, the cumulative loss to 2008 in respect of the 1998 level stood at 18%. In industry, and measuring competitiveness always in terms of unit labour costs, it was almost 30%. Naturally, labour costs are not the only explanation for the increase in unemployment, but they have undoubtedly been a major factor. That there were serious failings in the regulation of our labour market is something that practically all international economic organisations have been pointing out for years. The reform of our labour legislation was unavoidable. The changes made are essentially geared to increasing the flexibility of our labour market: the priority of firm-level agreements, limits on the so-called “ultra-activity” of agreements, new regulations governing dismissal for objective reasons and greater facilities for maintaining wage restraint at companies in difficulty are all elements of change aimed at preventing dismissals and higher unemployment from being the only option for many companies to stay in business.