Unions angry over labor market reform plans called Spain's first general strike in nearly a decade — but not until after the summer vacation — breaking Tuesday with a Socialist government desperate to restore confidence among investors wary of its debt-laden finances.
Union leaders said the hiring-and-firing changes in the labor market favor businesses, not workers, as they announced the Sept. 29 walkout.
Prime Minister Jose Luis Rodriguez Zapatero, who has touted his close ties with organized labor since taking power in 2004, has "changed lanes" in his strategy for fighting an economic crisis marked by a 20 percent jobless rate, said Candido Mendez, leader of UGT, Spain's largest labor federation.
Among other things, the reforms are expected to make it easier and cheaper for money-losing companies to lay people off, although they also include nods to unions, such as making it more expensive for companies to give workers temporary contracts with few benefits.
"We have witnessed the collapse of the political discourse of the current government," Mendez told a news conference.
The government says reforms are essential to encourage companies to hire and chip away at unemployment, stimulating an economy which only just crawled out of nearly two years of recession.
The government's hefty outlays on unemployment benefits, other social spending and economic stimulus measures have fueled an outsized deficit that has caused investors and markets to fret that Spain might eventually have trouble financing its operations and need a bailout like Greece did.
Spanish business leaders complain that the current law discourages them from hiring people to full-blown contracts because if they have to be laid off, they are entitled to severance pay of as much as 45 days per year worked — one of the richest deals in Europe.
So a third of the Spanish work force has to settle for temporary, so-called "garbage contracts" for as little as a few months and with little severance pay. The proportion is one of Europe's highest, and the vast majority of people laid off in Spain during the recession had them.
The government reportedly wants to lower the severance number from 45 to 33 days for some contracts.
Under pressure from opposition parties, which almost defeated a deficit-reducing austerity package last month, Zapatero's government announced a concession Monday: rather than submit the labor reforms to Parliament for a yes-or-no vote allowing for no amendments, it is now willing to negotiate changes, although not right away.
The reform package is expected to be approved in a Cabinet meeting Wednesday, and submitted to Parliament for a vote June 22. If passed, the reforms would take effect right away. But then Parliament would undertake debate on changes and vote again, and the initial decree would be adapted to reflect any amendments. This could take a few months.
Spain's last general strike was in 2002 against a center-right government, and also was triggered by labor market reforms.
While Zapatero has taken pride in his tight relations with unions, the harsh reality of recession has forced him to renounce pledges he maintained until just a few weeks ago, such as promising not to cut social spending or public sector wages.
The unions scheduled the strike for three months from now, after a civil servants walkout last week against pay cuts drew little support.
The Sept. 29 date coincides with a series of Europe-wide rallies against austerity cuts.
Mendez said the date was also "opportune" because Spaniards would also know more other planned reforms that might delay their retirement age from 65 to 67, and about the government's 2011 budget, which might feature even more austerity.
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