The prospect of a general strike in Spain has moved one step closer after the government and unions failed to agree on long-awaited labour reforms.
Overhauling the labour market is considered crucial to ensuring the country’s long-term economic recovery after a crippling recession. But Spaniards could down tools in protest if Prime Minister Jose Luis Rodriguez Zapatero makes it easier for crisis-hit companies to reduce their workforce.
Acknowledging a wish to reduce the cost of redundancies, the premier denies workers will lose their rights.
“We want to make a clear change as regards firms’ internal flexibility,” he said.
The failed talks followed a one-day public sector strike on Tuesday in protest at an austerity plan that only narrowly scraped through parliament.
Zapatero’s minority ruling Socialists are now talking to smaller political parties to help push the labour reform through.
“They are going to carry out this reform because the markets are asking for it, at the end of the day, they are our creditors, because the IMF is asking for it and the EU as well,” said Josep Duran i Lleida of the Catalan nationalist party CiU.
The recession has doubled unemployment in Spain to 20 per cent in just 2 years. The country’s big budget deficit has scared world markets amid concerns Spain will follow Greece into a debt crisis.