The International Monetary Fund has urged Spain to press ahead with more job-market reforms aimed at cutting its unemployment rate of 20.7 percent.
The IMF also released its review of Spain's economy on Tuesday, which says the policy response to Spain's economic challenges over the last year has been strong and wide-ranging, helping strengthen market confidence. But the IMF says much more bold reforms are needed to substantially reduce unemployment.
It urges the Spanish government to move away from indexing wages to inflation, and cut severance payments to at least EU average levels.
Restrictions on dismissing established workers have made Spanish companies wary of hiring people, especially younger workers entering the job force.