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Spain unions mull reply to austerity moves on labour
Published in Saudi Press Agency on 27 - 05 - 2010

Spanish unions met on Thursday to decide how to respond to austerity-driven labour market reform, a stance that will help decide whether Spain can defuse an economic crisis that has spooked international investors, according to Reuters.
How workers react is being scrutinised by investors fearful that if violent protests against drastic spending cuts grip Spain as they have in Greece, it will be much harder for the Spanish government to implement austerity measures.
Separately, parliament was preparing for a cliffhanger-style vote later in the day on a 15-billion-euro austerity package, with the Socialists apparently heading for a win by as little as one vote.
Union leaders were holding an extraordinary meeting to decide how to deal with the austerity measures rushed out by the Socialist government to dispel fears that Greece's debt crisis will spread across the euro zone to Spain.
Spanish unions comprise an important element in labour market reform seen by economists as vital to restoring competitiveness and sustainable growth to an economy now with 20 percent unemployment, the highest in the euro zone.
Economists say labour reforms would allow Spain's economy to cut the costs of hiring and firing, where payments for laying off workers are some of the highest in the OECD.
The two largest unions, Comisiones Obreros (CCOO) and the Union General de Trabajadores (UGT), have met several times with business association CEOE this week to hammer out an agreement before a government deadline for the reform at the end of May.
COMPLEX ISSUE
"Labour reform pacts are just as complicated today as they were yesterday," a CCOO spokesman said as the meeting started. "We will stay at the negotiating table until the last minute. All sides, business leaders, government and unions are very convinced of their positions."
The unions have already called a public sector strike for June 8 to protest against austerity moves announced earlier this month to accelerate reductions in the budget deficit. The main question now is whether they will go further and call a general strike involving public and private sector workers.
"The only card the unions have left is a general strike. So the question is what do they want from the labour reform so as not to call that card. They're running out of time," said Ismael Crespo, a political analyst at Fundacion Ortega y Gasset.
The unions were to hold a news conference after the meeting at 6 p.m. (1600 GMT).
The austerity package would save an additional 15 billion euros and includes wage cuts of 5 percent for civil servants this year. It aims to cut the budget deficit to 9.3 percent of gross domestic product this year and then to 6 percent in 2011, down from 11.2 percent last year.
Spain's government announced the tougher austerity after the European Union and International Monetary Fund approved $1 trillion in emergency funds for weak euro countries in an effort to contain the extent of the euro debt crisis.
Spain's challenge was highlighted early this week when global financial markets slumped on news that its central bank had taken over a small, regional savings bank, prompting fears for the stability of the banking system.


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