ECB asked Spain for wages cuts in return for bond purchases

The European Central Bank sent a letter to the Spanish government in August asking for wage cuts and the creation of "mini-jobs" to address the issue of youth unemployment in exchange for buying Spanish government bonds in the secondary market, Prime Minister-elect Mariano Rajoy told union leaders in a meeting last week.

Rajoy was informed of the content of the letter by different sources in the outgoing Socialist government.

The "mini-jobs" would pay salaries below the minimum wage, which in Spain is 541 euros a month.

The letter from the ECB was taken into account in a subsequent agreement reached between the Socialists and the main opposition Popular Party to enshrine the binding principle of fiscal discipline in the Constitution.

Rajoy said on Tuesday that once his government is installed, one of his first moves will be to present a draft organic law to accompany the constitutional amendment. The law will impose a budget deficit ceiling on the government of 0.4 percent of GDP by 2020.

The Popular Party leader told union leaders that he would also use the letter from the ECB as a road map for policies aimed at ensuring that Spain remains in the vanguard of the euro zone.