Spanish government approves crucial labor reform and budget for 2022
Spain’s left-wing ruling coalition is securing its retention in power with the approval of a landmark labor reform and a new national spending plan for next year that includes a large disbursement of stimulus funds in the event of pandemic
MADRID – Spain’s ruling left-wing coalition on Tuesday ensured its stay in power with the approval of a landmark labor reform backed by both unions and employers and a new national spending plan for next year which includes a significant disbursement of stimulus funds in the event of a pandemic.
A range of left-wing and nationalist lawmakers have given the final green light to Spain’s 450 billion euros ($ 509 billion) budget for 2022, which allocates more than half of funds to education, health, pensions , subsidies and other forms of social spending.
The budget includes the first 20 billion euros of the 70 billion euros ($ 79.2 billion) in total given to the country from the European Union’s COVID-19 stimulus funds. The European Commission, the executive arm of the 27-country bloc, transferred a first tranche of € 10 billion ($ 11.3 billion) to Spain earlier this week.
His cabinet also adopted a decree on Tuesday revising the country’s labor rules, a commitment by the Sánchez government with the European Commission before the end of 2021 to secure the next tranche of pandemic funds from the EU.
The labor reform rolls back business-friendly regulations passed in 2012 by a previous conservative administration at the height of the sovereign debt crisis of the past decade.
It limits most of the temporary contracts that prevail in the euro area’s fourth-largest economy to a maximum of three months and brings back collective bargaining with unions as the main channel for negotiating contracts. It is also adopting the leave program used to avoid layoffs during the COVID-19 pandemic as a fixed tool businesses can turn to in future crises.
The reform was sanctioned by labor unions and professional associations, a rare achievement for the government and a personal victory for Labor Minister Yolanda Díaz, a former labor lawyer who has become the rising star of United We Can, the junior coalition partner.
“This reform turns a page on precariousness in Spain,” Díaz told reporters at a weekly press conference after the Cabinet meeting, referring to official data which shows that one in four contracts in Spain is up for grabs. short term, the highest rate in the EU.
The country’s unemployment rate, at 14.5% in October, is also one of the highest in Europe.
“I dare say that there are young people and women who have not had a decent contract during their lifetime,” added the minister. “Now we are going to give them the opportunity to break the trap of precariousness.”
The new rules will take effect on Wednesday, although the government will again have to find support from small parties to ratify the changes in a parliamentary vote early next year.
Sánchez’s minority coalition controls 155 of the 350 seats in the Congress of Deputies and needed the votes of Catalan and Basque nationalist parties, among others, to pass legislation.