The Socialist Party (PSOE) on Sunday unveiled a plan to reanimate the ailing Spanish economy in order to stem rising unemployment, prevent fresh rounds of layoffs and to alleviate the effect of the recession on families.
Opposition leader Alfredo Pérez Rubalcaba presented his proposals after a meeting with party chiefs in Madrid. The text calls for the state to award credits from now until 2015 to companies that do not sack workers and the creation of a national fund worth 10 billion euros that out-of-work families in danger of eviction can tap to meet their debts with the banks.
The PSOE believes that the unemployment rate of 27 percent — some 6.2 million people — is evidence that the government’s austerity measures have failed and that credit flows to the private sector needs to be encouraged. The main opposition party also wants a debt-restructuring plan for families unable to meet their mortgage payments, with “the eventual losses to be met equally by the state and the lender that sold the mortgage.” The 10-billion fund would be open to families who find themselves in dire straits “for unexpected reasons” such as unemployment.
The PSOE said that the funds could be tapped from the “credit line open with the European Stability Mechanism (ESM), which still has 60 billion euros available” after Spain’s banking sector bailout. Rubalcaba also suggested drawing a 20-billion-euro fund from the ESM to finance companies, encourage self-employment and to give Spanish companies a nudge into global markets.
In its proposal to stem the tide of mass layoffs, the PSOE proposes that salaries at companies in financial trouble be reduced, but financed 50 percent by the state. If the worker is over 50 years old, the government should pick up 60 percent of the bill. The opposition noted that the system already functions in Germany, where companies who have tapped the state to avoid laying off staff “have more than 1.5 million employees combined.”