Spain's Zapatero defends labour market reforms

12th June 2010, Comments 0 comments

Spain's prime minister Saturday defended his proposed labour reforms in the face of criticism by two main labour unions who have threatened to call a general strike over the plan.

"The reforms are substantial and balanced because they maintain the rights of the workers and match the expectations of those workers who have precarious jobs," said Jose Luis Rodriguez Zapatero.

The Socialist government on Friday unveiled details of its proposed reforms that are aimed at reviving economic growth and allaying market fears over its public finances.

The government is pushing ahead with its own version of the plan after talks between unions, employers and the government to reach a consensus collapsed on Thursday after nearly two years.

The cabinet is to approve the plan on Wednesday before it is voted on in parliament on June 22 where the socialist government is seven seats short of a majority.

The labour reform plan is "a very elaborate document which tackles the most important changes that are needed in our labour market for stability in employment" and "flexibility for companies," Zapatero said.

Spain's two largest unions, the CCOO and the UGT, have threatened a general strike if the government unilaterally imposes the reforms.

The plan "undermines the rights of workers," UGT head Toni Ferrer said on Saturday.

Spain's main employers' organisation, the CEOE, also condemned the plan, but for the opposite reason, saying in a statement that it failed to include a "real reduction" in redundancy costs and will not create more jobs.

Spain's unemployment rate has soared to 20 percent of the workforce -- the second highest in the European Union after Latvia -- since the collapse of a property bubble at the end of 2008.

Many economists blame the high jobless rate on the high cost of firing workers in Spain, which makes employers reluctant to hire staff and encourages the use of temporary contracts that have few benefits and rights.

Among the measures included in the draft published by the labour ministry is the creation of a government-sponsored fund for each worker that could be used by firms to pay a portion of an employee's severance in case of a dismissal.

© 2010 AFP

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