Europe imposes to keep the labour reform in exchange for the transfers

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Susana AlcelaySEGUIRMaría CuestaSEGUIRMadrid Updated: Save Send news by mail electrónicoTu name *

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Spain faces a vital week in the negotiation of the rescue of the European Union to alleviate the effects of the coronavirus. And the messages coming from Brussels on all of the countries so-called “frugal” , are anything but encouraging for the interests that it defends Pedro Sanchez with their partners. The distribution of the reconstruction fund of 750,000 million will be dealt with in a European Council on Friday and Saturday, but there is still a lot of cloth to cut before basting the agreement. Or, better said, many alliances to mend. The direct transfers that defends Sanchez is facing the reluctance of the northern countries of Europe , led by the Netherlands. The “hawks” calling for a compliance in exchange for the funds, that is, that the grants are closely related to the requirement of structural reforms and a strict control over the same.

The starting point with the Spain lodged with Brussels does not help. The chief Executive comes with all the great reforms that Europe put it as a condition of Spain in the 2008 crisis to rescue the Banking, deactivated s. The of pensions and the mechanisms for expenditure control have been affected by the explosion, also the reform of active employment policies , that should control more of unemployment benefits and link more closely with active and passive policies. Since Spain came out of the range of control of Brussels, nothing has been done in the matter of reforms.

But if the paralysis reformist Government is concerned, even more so does your story. The pact with the radicals of Bildu for the repeal of the labor reform in the middle of negotiations with european fell as a jug of cold water. The agreement, forced by United we Can, and are made at the margin of social dialogue, was put in question by the vice-president of economic, Nadia Calviño, down by the blow on the table of the businessmen. The chief Executive has not ruled on the issue, but yes that has reminded us that the repeal “of the most harmful of the labor reform” is included in the programme of government, the Executive coalition.

But this ambiguity does not like it in the north of Europe. The regulations with which Sanchez plays the ball it was agreed with the european authorities in 2012 , and was one of the conditions imposed in exchange of the bailout of the financial system. Their high amount of flexibility allowed to stop the bleeding of nearly four million of redundancies and lay the groundwork for the economy to begin to create jobs with growth of 1% two years later. What are the negative side? Spain gained competitiveness with the trimming of wages and the insecurity gained ground.

“The threat continued with the repeal of the labor reform is not good. And much less what is signing an agreement on paper wet in the middle of negotiations,” says economist Marcel Jansen, a Dutch resident in Spain for eighteen years and a phd in Economics and professor of the UAM. “I don’t feel comfortable with the intransigence of the Dutch Government, but I think that Spain has to offer tranquility and give assurance that the next crisis will be able to cope by itself because it will have built its fiscal cushion,” says Jansen.

beyond the political impact, this standard becomes to have now more importance than ever to the companies, fearful of a tightening, which will immediately result in termination of contracts.

Spain is facing an unprecedented downturn in its economy , with setbacks of two digits this year in GDP, according to all the agencies, and with an unemployment rate which is expected to exceed the 20% this year. The timid recovery phase will not come into 2021, according to both experts.

Since the onset of the health crisis in Spain you have destroyed a million jobs and two million workers are still in STRONG of force majeure, waiting to be incorporated into their companies when it relaxed regulations for temporary at the end of September. The fear is that at that time still has not been recovered, the consumption and the companies are not able to digest the additions and FATE end up becoming ERE. The labour market reform could play then a main role.

“Europe is not going to allow the repeal of the labour reform,” says ABC a source close to the negotiations in europe. is “you can’t go back, it will not be possible” , he concluded. He recalled that Spain will be the second country that most funds will receive, after Italy, about 140,000 million ,and that before you will need to present to the community authorities investment plans, and reforms . He said that in this conditionality, Brussels be agreed with the countries the amounts to be received and the timeline to implement the measures. “It is unthinkable to undo the trodden path”, he concluded.

in Silence we Can

The negotiations are now focused on how will the conditionality and, again, at this point it is felt the two currents in the Government. In contrast with the silence of we Can , in the faction socialist the Executive accepts the follow-up that involves the european semester, which they understand would not just political cost since it does not involve any change with respect to the current situation. They refuse, however, to believe mechanisms of control new to these measures . The last of the reports of the european semester does not offer a good picture of Spain. 23% of the recommended reforms to Spain had a “limited progress” and up to 40% obtained only “some progress”.

The other big pending task is the fiscal consolidation and the control of the debt . Spain came into this crisis with a structural deficit, a persistent and a level of indebtedness is very high despite accumulating several years of vigorous growth, a situation to which the president of the Airef has asked “self-criticism” repeatedly. “The playing field is uneven. But it is not the fault of the nordic countries, that did make the duties. To paraphrase Jeroen Dijsselbloem: “you can’t ask for aid with one hand while with the other sign pacts of counter-reforms,” concludes Jansen.