Most opposition parties agreed to abstain on a critical parliamentary vote on Spanish labour reform yesterday, giving the minority socialist Government enough votes to pass the new laws. The measures, which will ease hiring and firing regulations dating from the 1970s, are seen by the Government of José Luis Rodríguez Zapatero as essential to lift Spain out of recession and restore market confidence in the eurozone’s fourth-largest economy.
With one in five people out of work and mounting international pressure to cut its ballooning deficit, Spain has been forced to make swingeing cuts and overhaul the labour laws in order to avert a Greek-style bailout.
Opposition parties, including the main conservative Popular Party (PP), say the changes do not go far enough and are proposing amendments that could see the Bill drag through parliament for a year. “We will abstain from this vote and our intention is to table amendments to make it evident that another labour reform is possible,” said Soraya Sáenz de Santamaria, PP parliamentary spokesman.
The markets did not respond to the PP announcement. Before the reforms were announced, Spanish bond spreads reached record highs against the German benchmark, amid growing concern over prospects for the Spanish economy.
The reforms will cut the cost of dismissing workers from 45 days for each year worked to 25 in some cases. Companies will be able to make workers redundant more easily in hard times and contracts will be simplified. The moves have angered unions and business leaders. Workers are to take to the streets next Tuesday in the Basque Country and Navarre in a protest strike. The two main unions, the General Workers’ Union and Workers’ Commission, are planning a general strike on September 29.
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Miguel Ángel Fernández Ordóñez, the Governor of the Bank of Spain, criticised the measures, saying the Government “has modified some elements of the current system without changing some of its more substantial aspects”. Gerardo Diaz Ferran, head of the Spanish Confederation of Business Organisations, said that the reforms would not create new jobs.
They follow a €15 billion (£12.5 billion) austerity Bill that scraped through parliament by one vote last month and provoked a strike by civil servants.