These reforms, in turn, would contribute to progress in fiscal consolidation, as they would enhance the perception of the sustainability of public finances and would reduce the degree of sacrifice implicit in the necessary fiscal austerity that must be maintained in the coming years. There are several fields in which the Spanish economy requires an overhaul of its structures, to make them more consistent with our membership of a monetary area and with a highly competitive and globalised world economy. Two such fields are the labour market and the financial system, on which I shall elaborate in detail later on in my address. Correcting the inefficiencies weighing down on the functioning of our labour market is of paramount importance since, as the market is currently structured, the obstacles to gaining competitiveness and generating sustainable employment are patently clear. In particular, these shortcomings have meant that the adjustment of the economy in the recent crisis has fallen disproportionately on employment as a result, among other reasons, of the scant sensitivity of collective bargaining to the specific situation of firms. The extent of these rigidities is not merely cyclical; their effects are largely permanent as they force firms and workers out of the market, causing lasting damage to productive capacity and human capital. Last week the government approved a series of measures aimed at correcting these inefficiencies, specifically at reducing duality in hiring and at reinforcing companies’ internal flexibility.
This amount has to be repaid within five years (extendable to seven years) and earns the market rate of interest (at least 7.75%). The figure is not final because four processes have yet to be authorised. In addition, Cajasur will receive the aid finally resulting from the competitive procedure. BIS Review 92/2010  5  Furthermore, the savings bank DGF, which is financed by contributions from savings banks, undertook to provide € billion to Caja Castilla-La Mancha. These amounts, while substantial, are small compared with those provided by the taxpayers of other countries. Therefore, it is fitting at this point to recall that Spain is now enjoying the benefit of the decision in 1999 to oblige banks to record a general provision: since January 2008 our banks have used some € billion of this provision to cushion the impact of the crisis on their income statements. As can be seen, this amount is more than the sum of the funds used or to be used by the FROB and the savings bank DGF in the operations described above. Thus the main decisions have already been taken on the required restructuring and downsizing of the savings bank sector. One task remains in connection with these credit institutions: a legal reform to enable them to issue instruments eligible as top-quality own funds and to provide formulas conducive to improved governance and professionalisation of savings bank management.