Employers want rethink on agreed wage hikes

The Confederation of Spanish Business Organizations (CEOE), Spain's largest employer group, is looking to renegotiate agreed wage hikes for next year - of between 1.5 and 2.5 percent - with the labor unions.

The rises were agreed in exchange for union approval for wage moderation this year. However, since then talks on drawing up new rules for collective bargaining between employers and labor organizations have been abandoned after the two sides failed to reach agreement on their differences.

The CEOE and the country's main unions, CCOO and UGT, are currently engaged in negotiations to extend a cap in wage rises to 2014 as part of efforts to help the country recover from its worst recession in decades. However, the CEOE believes the hikes agreed for 2012 present an anomaly. "We have to decide what we do with 2012," the secretary general of the CEOE, José María Lacasa, said Monday.

In principle, the unions say they are in favor of wage restraint, as long as it is part of a broad pact that also covers caps on company margins and prices.

"We can't accept that," Lacasa said Monday, although he said the CEOE was open to the idea of companies plowing earnings back into investment.