Zapatero puts out feelers to unions on reforms

With his popularity plummeting in the polls after embarking on a draconian austerity drive, Socialist Prime Minister José Luis Rodríguez Zapatero faces another bumpy ride over the next 15 days as he seeks to persuade the country's main unions of the need to overhaul the state pension and collective bargaining systems.

The Zapatero administration and the leaders of CCOO and UGT have given each other until January 10 to take a measure of how they stand on issues which remain the unions' key bones of contention and which led them to hold a general strike on September 29 and recently hint at the possibility of another one.

Locked in a desperate battle to convince the financial markets of Spain solvency, Zapatero has found himself forced to undertake painful measures such as slashing public sector wages, freezing pensions and pushing through labor reforms. His government now wants to push back the legal pensionable age to 67 years from 65 years and extend the current period for calculating final entitlements.

The latest manifestation of Zapatero's new-found reformist zeal is the proposal to allow companies to renegotiate collective agreements starting from scratch without recognizing previous rights, a move which is anathema to the unions.

A meeting Zapatero held with CCOO leader Ignacio Fernández Toxo and his counterpart at UGT, Cándido Méndez, alongside labor Minister Valeriano Gómez on December 19 made the unlikelihood of reaching a broad agreement painfully clear.

With the Socialists suffering in opinion polls, Zapatero is keeping his cards firmly hidden about his intentions of standing for a third term when his mandate runs out in March 2012. Last week he told journalists that he had made his decision but that he was not going to make it public at this stage. But he has made it known to his advisers that he has no intention of throwing in the towel by calling early elections even if the Socialists fare badly in municipal polls slated for May.