Spanish labour market reform talks break down

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Talks between Spanish unions and employers over labour market reform have collapsed just days ahead a deadline from the Socialist government for a deal.

Despite the presence of Labour Minister Celestino Corbacho for the first time in weeks at the talks, union leaders and employers failed to bridge their differences on Saturday in the latest attempt to thrash out a deal.

Spanish newspaper El Pais said that the crunch talks on shaking up Spain's strict labour market rules were "flirting with failure".

The government has given the two sides until the end of the month to work out an agreement or else it is likely to impose a reform by decree despite a threat from the main unions to hold a general strike.

El Pais said that the government was ready to give the talks "a few days" more but only if a realistic agreement were in the works, which did not appear to be the case.

With no talks planned on Sunday, the last chance was to be during a final meeting on Monday ahead of the end of month deadline.

If the government decides to go ahead with the reform by decree, then the cabinet would have to be approve it by June 11 at the latest.

Spanish Prime Minister Jose Luis Rodriguez Zapatero in February unveiled a plan to reform the country's strict labour market rules.

The measures include allowing firms to cut costs by shortening workers' hours but without making them redundant, as Germany has done, to reduce the use of temporary contracts, promote permanent part-time job contracts and encourage the hiring of unskilled youths.

Earlier this month the International Monetary Fund called for "urgent" reform and its head, Dominique Strauss-Kahn, said "in Spain you have a lot of rigidities, the labour market doesn't work for many reasons."

© 2010 AFP

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