The government predicts that this year it is possible that 110,000 jobs can be created this year and another 300,000 in 2015. In two years, thirteen percent (400,000) of the jobs that were lost since 2007 will be recovered. This is not just some sanguine annoucement mean to gear up excitement before elections, although the government could delay general elections until 2016 in order to capitalize on a better job atmosphere.
The Spanish Confederation of Employers? Organisations (CEOE) and Funcas agree with the government?s forecast. The latter even thinks that 155,000 jobs will be created in 2014. Unlike previous eras, payrolls will fatten while the economy grows slowly. Labor reforms are starting to bear fruit, which is a big change after years of crisis made it hard for companies to hire and hang on at the same time. Further, unlike during previous short-term crises, recent labor reforms have gone so deep that payrolls are at their lower limit. If any growth comes, then companies will be forced to hire.
What if the economy grows more than expected? Rajoy said that in 2015 the GDP will rise 1.8%, which is three tenths of a point higher than the last prediction. This increase is enough for the government to revamp its tax reforms to align with the latest figures, and whatever decisions they make could speed or slow economic growth.
A tax hike and reclassifying the VAT would threaten slight increases in consumer spending, and we are still waiting to see whether our export business model has changed for the better. A deep and aggressive tax reform is needed, but it cannot threaten job creation or corporate competitiveness.
