[Spain] Economy Chief Says Spain Will Consult Business On Labour Law

10 MAR 2020

Spain’s top economic official has tackled investor’s issues with the nation’s new leftwing coalition by promising to barter for sensitive changes to labour law with enterprise and unions and to steadily reduce the nation’s fiscal deficit, Luxorr Media reports

Nadia Calviño - deputy prime minister for the financial system - insisted In an interview that the federal government - the first to include communist ministers for 80 years - would keep away from any radical break with the ruling Socialists’ earlier record.

“I don’t see any motive for traders to be scared after they know what we have now been doing for the previous 20 months,” Ms Calviño advised the Financial Times, emphasising the federal government’s focus on “sustainable and inclusive” development and its promise to abide by EU price range guidelines.

“You can not have long-term financial and monetary stability without social stability,” she added.

Many executives and traders have been reassured by the main authorities position Ms Calviño, - a former senior EU official tipped by some as a possible head of the Eurogroup of eurozone finance ministers - has been given. However, they continue to be involved with the Socialists’ coalition with the radical-left Podemos party, which controls the employment, consumer affairs and equality ministries.

Pablo Hernández de Cos - Governor of the Financial institution of Spain - warned that altering Spain’s landmark 2012 labour reform, one of the federal government’s key targets - might harm the nation’s competitiveness.

Many economists say the labour reform, which reduces severance pay and gave precedence to company-level instead of sector-wide industrial negotiations, bolstered Spain’s restoration after the monetary disaster. Within the 5 years to the end of 2018, the nation added over 2 million jobs and improved its export efficiency.

The Spanish financial system recently slowed down but the nation continues to outperform the eurozone, with two per cent growth in 2019.

Ms Calviño promised a labour reform strategy that would be gradual and consensual. She talked of the broad support for banning employers from dismissing staff for taking sick leave. However, she added that additional modifications to the labour law would be subject to negotiation.

“The remainder of the problems will likely be channelled by way of social dialogue,” she said. “We need to reinforce this social dialogue to be able to make sure that any reform is balanced, doesn’t endanger job creation and . . . that [it will endure] for a lot of years.”

Ms Calviño emphasised how, rather than imposing a level of its devising, the federal government had negotiated a minimum-wage increase with enterprise and unions this year.

Nevertheless, the coalition settlement between the Socialists and Podemos seeks a number of urgent alterations to labour legislation. The changes include changing back to industry-wide negotiations on pay and conditions and limiting usage of subcontracting.

The federal government is also dealing with calls from Brussels to scale back Spain’s structural price range deficit - which presently stands at about 2.5 per cent of gross domestic product - by 0.65 per cent of GDP.