Spain says it will impose reforms
Unions warn of possible strike
MADRID — Spain’s Socialist government warned yesterday that it will impose what it called labor market reforms if unions and management fail to agree on changes needed for Spain to resurrect its economy and to reassure markets worried about the country’s ability to show growth and pay off debt.
The labor talks have taken on new urgency, with Prime Minister Jose Luis Rodriguez Zapatero under pressure from the European Union, the International Monetary Fund, and President Obama to take bold action and ward off a Greek-style debt crisis that would further hurt the euro.
Two ministers warned the government will give unions and management a few more days, then act decisively if needed. Hours later, another round of talks ended inconclusively.
Unions have said that if a unilateral government decree goes against the interests of workers, they will call a general strike.
Last week, the government won passage of a key austerity package by only one vote in Parliament.
Yesterday had been the deadline for a deal. Industry Minister Miguel Sebastian said the government will be flexible but wants an answer this week.
“Rest assured, if those talks ultimately do not produce the results we all want, the government is going to implement labor market reforms over the very short term,’’ Finance Minster Elena Salgado told a business forum.
Many economists criticize Spanish labor law as excessively rigid, discouraging employers from hiring. In the first quarter of this year, Spain limped out of nearly two years of recession with a jobless rate of just over 20 percent, the highest in the 16-nation euro zone.
Most workers are entitled to severance pay of 45 days per year worked if they are laid off, one of the highest levels in Europe and the main bone of contention in talks between Spanish unions and the main business federation.
Businesses say that kind of expense makes them wary of hiring, and thus they often resort to temporary contracts that cost them nothing in severance pay.
Indeed, a full third of the Spanish workforce has this kind of contract — a proportion also very high by European standards— and most of the people laid off in Spain during the recession had them.
The government wants the current talks to limit such contracts so people have more job security and the labor market is not so volatile if the economy tanks.