Cristina Lagarta, oops, I mean Christine Lagarde, IMF top boss and former right hand of fascist French President Sarkozy, wants Spain to slash salaries another 10% (a 7% was already cut last year to all public officers, excepted MPs).
Not just that Lagarde also wants a reduction of 1.7% in social security fees, along a substantial increase in the time needed to be entitled to a pension (from 25 to 35 years) and an undetermined further increase in the VAT tax (already dramatically increased).
She also wants impossibles such as to to reach "a credible social pact".
On the other hand her forecasts are gloomy, even in the event of acceptance of her stupid demands: private consume would fall initially on these changes (of course) and unemployment would remain extreme even in 2017 (26% forecast).
In spite of rising the VAT and demolishing the social fabric, Lagarde imagines that prices would drop.
Lagarde is a retard, reality instead
This woman is plain stupid (or rather a criminal and compulsive liar): salaries simply cannot fall under the living costs and she is not proposing any such measures other than hallucinating with a hypothetical price drop based on nothing.
Real effective measures would be to force the housing market to adjust prices downwards dramatically and brutally increase the availability of cheap public housing (and/or allowing squatting of speculators' idle property). The extremely high (and anti-market) costs of housing are surely the main barrier to salary drop. You just can't work for less that it costs you to live.
Another key barrier are the totally unjustified high prices of electricity bills, which have grown more than 50% in the last few years and more than 100% in the last decade. Spain now has the most expensive electricity bills in all the Eurozone, excepted Cyprus and Ireland.
If Spanish salaries have to fall, living costs have to fall first and foremost. And that means hurting the banks and the energy monopolies.
Neither Lagarde nor Barroso nor Rajoy will do that. But is the only logical thing to do other than outright communism.