The IMF warns of obstacles between regions: "Spain is not a single market"

The International Monetary Fund (IMF) believes that one of the main structural problems of the Spanish economy is a derivative of the autonomous State as it is organized. As stated by EL MUNDO Ara Stepanyan, senior economist at the institution, "Spain is not a single market". That means that, within the country, "there are different regulatory requirements that create obstacles for companies to move from region to region or expand."

Thus, Spain is in a paradoxical situation. On the one hand, it is in an increasingly integrated single European market, consisting of 27 countries of which 19 share a single currency and are making progress in the integration of their financial systems. On the other, its internal market is composed of several "mini markets" that diverge from each other , to the point that this constitutes an obstacle to their economic growth and, above all, to the solution of their greatest economic problem: unemployment.

Stepanyan has a good knowledge of the Spanish economy, as he is the co-author of the report released last week in which the Fund unambiguously defends the 2012 labor reform, which the Government now wants to partially repeal. In this regard, the IMF official has developed the thesis of the study by explaining to this newspaper that "the [labor] reform has worked well, giving flexibility in working conditions and wages, and facilitating the recovery of employment ". The Spanish labor market is an unparalleled thing on Earth - but for the bad - as reflected in a piece of information provided by the head of the IMF mission for Spain, Andrea Schaechter: "The average unemployment rate in Spain during the last 40 years has been 17% -18%. " The EPA of the third quarter of 2019 placed unemployment at 14.23%.

The productivity problem

But one of the most serious structural problems of the Spanish economy - and, by extension, of its labor market - is its low productivity, that is, the relationship between what a worker "produces" in an hour, discounting costs (salary) , energy, etc.). Productivity is key to containing inflation and, ultimately, it is what makes a country grow and generate long-term employment continuously. And the productivity of Spain has traditionally been very low.

The reasons for this phenomenon are many. One is the low productivity of Spanish SMEs, something that was already evident in a study carried out in 2015 by the BBVA Studies Service and the Businessmen's Circle. There are also other factors, such as the low investment in R&D of the Spanish economy. But what the Fund is emphasizing now is the disparity between regions.

It is not something new. That the State of autonomy that we have created unemployed has already been pointed out by the IMF in the past. A year and a half ago, in its Article IV - the annual review of the economies of the member countries - the institution said that it had " encouraged the authorities to improve regional coordination with the objective of reducing productivity disparities between regions ". Now, Stepanyan has reinforced that view,

The "regulatory requirements" mentioned by the Fund official are well known in Spain, and not only affect companies, as Stepanyan suggests, but also workers (for example, with the requirements of Catalan, Galician or Euskera to apply for certain positions in the regional administrations, and that without entering into social pressure in certain territories to address customers in local languages). That also leads to a second problem in the Spanish labor market: the lack of geographic mobility. In this regard, the Fund is aware that the mobility of Spanish workers is lower than that of their counterparts in other European countries

Now, there is a substantial difference between immigrants and those born in Spain. "Within the Spanish market, Spaniards have less geographical mobility than other Europeans, but also less than foreigners living in Spain," Schaechter explains in an email. The Spanish, therefore, are less competitive than those who come from abroad when looking for work.

According to the criteria of The Trust Project

• Spain
• IMF
• Unemployment

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