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Spanish labour reform goes to knife-edge vote, EU funds at stake

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By Reuters
Spanish labour reform goes to knife-edge vote, EU funds at stake
Spanish labour reform goes to knife-edge vote, EU funds at stake   -   Copyright  Thomson Reuters 2022

By Belén Carreño

MADRID – Spain’s parliament is preparing to hold a knife-edge vote later on Thursday on the minority leftist government’s labour reform, whose rejection could complicate access to EU pandemic recovery aid.

The Socialist-led government’s usual allies in the house for the past two years, such as the Catalan separatists ERC, have said they will vote against the legislation that overturns a previous conservative administration’s pro-business reforms by granting more power to unions in bargaining contracts.

But unprecedented support promised by the opposition centre-right Ciudadanos and the conservative Catalan pro-independence PdeCat should allow for its passage by a wafer-thin majority.

There is further uncertainty around whether a small group of conservatives from the Navarre region will abstain or vote against it.

The landmark reform – a long-standing electoral commitment of the Socialists and their coalition partners Unidas Podemos – is a cornerstone of a raft of conditions for Spain receiving the next disbursement of European recovery funds worth 12 billion euros ($13.55 billion) later this year.

“This is the most important law of the legislature,” Labour Minister Yolanda Diaz told parliament, calling for the approval of the bill, which she said would counter Spain’s chronic problem of unemployment, the European Union’s second-highest after Greece, and precarious work.

Spain is the EU country with the highest use of temporary contracts, covering around a quarter of the workforce. The new regulation tightens conditions for their use, limiting them to short periods of time. Also, providers of outsourced staff will have to adapt workers’ terms to those of the company they are assigned to.

Diaz in December forged a pact with the unions and employers’ organisations, allowing the government to press ahead with the reform.

However, some of the details of the pact that had to be reflected in the legislation irked the government’s allies, ERC and the Basque nationalists PNV.

Parliament is highly fragmented and polarised, making the administration reliant on a number of small regional parties to pass laws. Whether Thursday’s vote will redefine or diminish support for the government still remains to be seen.

One of the labour groups that stands to benefit the most from the new legislation are hotel housekeepers, known locally as Kellys, who have long been a symbol of precarious work in the tourism-dependent country. Diaz said such workers’ annual income would increase by about 2,500 euros in some cases.