Tepid response to Spanish labour reform plans

Plans to reboot the Spanish economy by relaxing employment laws have received a lukewarm response from unions and employers alike.

In order to reassure potential investors that it can avoid a Greek-style budget crisis the government needs to bring down the 20 per cent unemployment rate.

But an unpopular move to raise the retirement age to 67 has upset the unions whose cooperation on the labour reform proposals is vital if they are to succeed.

CCOO union leader Ignacio Fernandez Toxo said:
“We will resolutely defend the current public pension system but we will also present alternatives.”

The argument is that if employers are able to make staff redundant relatively easily and cheaply they will be more willing to hire people as the economy picks up.

The government’s proposals require employers to work with the unions to encourage more part-time contracts, reducing working hours as an alternative to firing staff, as well as cutting youth unemployment which is currently at 40 per cent.