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Spain — Government to present labour market reforms on 16 June 2010

03 June 2010

Prime Minister, Jose Luis Rodriguez Zapatero, said yesterday that "the government will approve new labour market reforms at a cabinet meeting on Wednesday 16 June whether or not there is agreement [with unions and employers], Reuters reports.

The announcement comes after negotiations failed last Saturday due to strong disagreements between employers and union representatives.

Spanish companies have long complained that expensive hiring and firing costs discourage recruitment and have pushed up the unemployment rate to 20.04% in Q1 2010.

Unions on the other hand, want to avoid any erosion of the benefits and job protection mechanisms permanent workers already enjoy.

Labour market reforms, bank re-structuring and a reduction in the national deficit are regarded as essentials to solve Spain's economic problems and pulling the country out of its worst recession in decades.

The Prime Minister's austerity plan of 15 billion Euro was passed by just one vote on 27 May 2010, prompting speculation that Zapatero might be forced to call early elections if his 2011 budget proposal is rejected in September.



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