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Summary The IMF has suggested Spain to cut government workers wages and impose new taxes.
Spains prime minister says that for now he will not implement the International Monetary Funds latest recommendations, which include cutting government workers wages further, because they are nonbinding advice.The IMF is one of three organizations Rajoys government turned to for an assessment of the state of Spains banking sector ahead of a eurogroup bailout.Rajoy said Saturday the proposals are only suggestions.The latest IMF document, released Friday, is not part of a bank sector report, rather one of regular economic analyses issued on the state of Spains economy.The IMF also suggested Rajoys government increase value-added tax, or VAT, a type of sales tax, and eliminate a recently re-introduced deduction on mortgage payments for first-time homebuyers. The previous Socialist government boosted VAT to 18 percent in 2010.
