THE governor of the Bank of Spain has recommended temporarily scrapping the minimum wage to tackle unemployment.
In his first annual report since taking office last year, Luis Maria Linde called for more flexibility in the labour market to counteract the nation’s increasing jobless population.
“It would be worth exploring the possibility of establishing new formulas that would allow, in special cases, temporary departures from the conditions laid down in collective bargaining agreements, or exceptional mechanisms to prevent the minimum wage from acting as a constraint on specific groups of workers with most difficulties in terms of employability,” he said in the report.
Spain’s minimum wage is currently set at €645 a month with a record 6.2 million people out of work.
The national unemployment rate has hit 27.2% while Andalucia has been named as the second hardest place to find a job in Europe with 34.6% of the population without work.
Nationally, youth unemployment has reached a record 57.2%.
Linde also suggested making reforms to the state pension by increasing the retirement age and changing how pensions are calculated.
The report, which calls for the official age of retirement to increase from 65 to 67, recommends that calculating the amount a person receives should be based on contributions made in the last 25 years of working life rather than the last 15.