Spain approves labor reform and budget for 2022

Spain’s ruling left-wing coalition secured its grip on power on Tuesday with the approval of a momentous labor reform by both unions and employers, and a new national spending plan for next year that includes a sizable outlay of funds to recover from the pandemic.

A series of left-wing and nationalist lawmakers gave final approval to Spain’s 450 billion-euro ($ 509 billion) budget for 2022, which allocates more than half of the funds to education, health, pensions, subsidies and others. forms of social spending.

The budget includes the first 20 billion of the total 70 billion euros ($ 79.2 billion) awarded to the country from the European Union’s COVID-19 recovery funds. Earlier this week, the European Commission, the executive branch of the 27-nation bloc, transferred a first installment of 10 billion euros ($ 11.3 billion) to Spain.

The approval of the budget is seen as crucial evidence of the parliamentary support of the minority coalition of the Socialist Party and the anti-austerity party United We Can. By clearing the obstacles with 281 votes in favor, 62 against and one abstention, the president of the Spanish government Pedro Sánchez released the pressure to advance the elections and increased his chances of ending his term, which ends in 2023.

His cabinet also approved on Tuesday a decree to reform the country’s labor laws, a commitment by the Sánchez government to the European Commission before the end of 2021 to ensure the next delivery of funds for the EU pandemic.

The labor reform reverses pro-business regulations adopted in 2012 by the then-conservative government at the height of the sovereign debt crisis of the last decade.

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The bill limits to a maximum of three months most of the temporary contracts that are prevalent in the eurozone’s fourth-largest economy and resumes collective bargaining with unions as the main channel for negotiating contracts. It also adopts the licensing program to avoid layoffs during the COVID-19 pandemic as a fixed tool that companies can turn to in future crises.

The reform has already been sanctioned by labor unions and trade associations, an unusual achievement for the government and a personal victory for Labor Minister Yolanda Díaz, a former labor lawyer who has become the rising star of Unidos Podemos, the junior partner. of the coalition.

“What this reform does, and this is the main thing, is to turn the page to precariousness in Spain,” Díaz said during a weekly press conference after the cabinet meeting, referring to official figures that show that one in four contracts in Spain it is the short term, the highest rate in the EU.

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