MercoPress. South Atlantic News Agency

Spanish unions have ten days to agree on labour market reforms

Support for Rodriguez Zapatero is rapidly eroding

Spanish unions and employees organizations have ten days to come up with an agreement of labour reform or the government will approve the initiative by decree, according to reports in the Madrid press.

The labour market reform is considered a crucial component of the additional austerity measures, (including a 5% cut in civil service salaries) which the Spanish government announced last week under strong pressure from the European Union.

The EU fears the Greek crisis could spread to similar cases in Portugal, Spain, Ireland (PIGS) and thus eroding the international confidence in the common Euro currency.

The report did not credit direct sources, but simply said that the government of President Jose Luis Rodriguez Zapatero informed unions and employees associations last Thursday that if an agreement is not reached the reform would de decreed.

Last Friday Spain’s first Vice-president Maria Teresa Fernandez de la Vega said that the government was expecting an agreement on the controversial labour market reforms (making it easier to fire people and cutting many long established perks from the time of dictator Franco), “in the coming days”.

Until the last batch of austerity measures announced last week, Socialist Rodríguez Zapatero had been reluctant to adopt unpopular measures and besides had a close link with the main union organizations.

Economic analysts have long stated unless Spain lessens the financial impact of contracting and firing workers, unemployment will remain at record levels and it will be very difficult to boost economic growth so the country can balance its budget and other accounts. Unemployment in Spain is above 20%, double the average in the Euro zone.

Meantime on Sunday thousands took to the streets of central Madrid to protest against the austerity measures and the latest opinion polls show that support for Rodriguez Zapatero is rapidly eroding according to Metroscopia, published in El Pais.

Support for the Socialists has dropped to 33.7% while the opposition (conservative) Popular Party has climbed to 42.8%, with a nine point difference, the largest since Mr. Rodriguez Zapatero took office back in 2004.

The poll found that Spaniards approve of the pay cut for public workers, but two-thirds opposed the pension freeze, and three-quarters thought the measures will be insufficient to get Spain out of its crisis.