A final attempt by Spanish trade unions and the employers' organization CEOE to agree on a labour market reform failed early Thursday, union sources said, according to dpa. Prime Minister Jose Luis Rodriguez Zapatero's government is now expected to adopt a decree to impose the reform aimed at revitalizing Spain's economy and reassuring financial markets about its solidity. European Union and other international analysts have urged Spain to make its labour market more flexible, amid fears of a Greek-style economic meltdown in the EU's fifth-largest economy. Spanish unions, however, resisted CEOE proposals to loosen some of the strongest worker protection in Europe. The parties, which have been negotiating for months, finally failed to seal a deal after 10 hours of talks Thursday morning. The government now intends to approve the reform on June 16. However, it will also need the green light from parliament, where Zapatero's Socialists are in a minority. The reform was expected to make firing workers cheaper for employers, with a guarantee fund covering part of severance pay, according to the daily El Pais. The reform is partly aimed at increasing the number of permanent work contracts. Spain's strong protection for permanent workers has led to the emergence of a two-tier labour market, where about a quarter of employees are on temporary contracts affording them few rights. Unions have said they will respond to a unilaterally imposed reform with a general strike. Public sector employees already staged a 24-hour strike on Tuesday, but it drew a weak following, arousing doubts about union strength.
