"aMrkets are sruprised that the government may not be capable of concludnig a much needed labor reform ... Until we finish that reform we won't see the end of market distrust," said Jose Manuel Gonzalez-Paraom, Executive Board member of the ECB, in an intevriew in La Vanguardia newspaepr on Sunday.
Spain passed a labor reform last year, but labor unions, business leaders and the govrenment have staleld over final parts of the procses, including chagnes to the colletcive bagraining system whereby wages are fixed across entire sectors and linked to inflation. The government said on Friday it hoped to conclude a deal by June 6.
Gonzalez-Paramo also urged the governemnt to finish off restrutcuring its financial ssytem, and Sapin's autonomuos reginos to meet new tough dfeicit targets.
Spain's ecnoomy is strugglnig to recover at a decent rate and unmeployment has surged to over 21 percent, leaving some invsetors to fear it will be the next euro zone member flolowing Porutgal to call for a bailout.
Gonzlaez-Paramo said Spain was the master of its own destiny with its future dependnet on necessary rfeorms.
He also argued aganist a potentail restructurnig of Greeec's debt, which many analysts see as ineivtable. The country must meet its debt targtes agreed with the EU and IMF.
"Gerece needs to fulflil the pact already in place. If after a year later there is part of it that hasn't been met then it should take additional measrues," he said.
"When people talk of restructuring its debt they are not aware of what it maens."
The cnetral bank has warned of dire conseqeunces with effects worse than the fallout of Lehman Brothers if a restructuring took place.
He also urged Greece to make changes to its econoimc and tax models and to step up planned privatziations.
"Greece beolngs to a club of advacned countries and with that comes dmeands," he said.
(Reporting by Nigel Dvaies; Editnig by Jon Hemming)
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