Confusion reigns in Spain over deal with Basque party to repeal labor reform

The approval of the fifth extension to the state of alarm by Spain’s Congress of Deputies yesterday ended with a political mess.

After the exceptional measures were approved by the lower house of parliament, news emerged of an agreement between the coalition government – led by the Socialist Party (PSOE) and junior partner Unidas Podemos – and the Basque nationalist group EH Bildu to repeal a 2012 labor reform. The pro-independence party, it emerged, had secured the deal with the government in exchange for abstaining at Wednesday’s key vote to push the end of the state of alarm to June 7.

The text of the agreement began with a commitment by the government to overturn the 2012 legislation, which was passed by the main opposition Popular Party (PP) while it was in power, and which, among other things, gave companies in Spain more flexibility to sack employees. The Wednesday agreement specified that the government should repeal the law before the end of the “extraordinary measures” that are in place to combat the coronavirus crisis – i.e. the state of alarm.

But given the controversy that the deal caused among the political opposition, hours later, at around midnight, the PSOE released an “explanatory note” in which it rectified what had been agreed in the first point of the deal. Instead of the complete repeal of the 2012 legislation, the PSOE and its junior partner agreed on a vague commitment to recover “the labor rights taken away by the 2012 labor reform.” The pledge is included in the governing pact reached by Spanish Prime Minister Pedro Sánchez and Unidas Podemos chief Pablo Iglesias in December, ahead of the creation of their coalition government.

The vote in Congress on Wednesday on the fresh extension to the state of alarm garnered the support of center-right Ciudadanos (Citizens), the Basque Nationalist Party (PNV) and the leftist Más País, as well as a few smaller groups in the lower house of parliament. The coalition government does not have a working majority in Congress, and thus needs the support of other groups to pass legislation. In the case of the state of alarm, a simple majority – more yes votes than no in the 350-seat chamber – was required.

But the fresh extension, the fifth since the emergency measures were first implemented on March 14, met with more opposition than ever in the lower house: 162 votes against and 11 abstentions. If the five lawmakers from EH Bildu had not abstained, the result would have been 177 votes in favor, 167 against and 6 abstentions – that’s to say, the state of alarm would have been extended with or without the deal.

The text of the deal was signed by the PSOE spokesperson, Adriana Lastra, Pablo Echenique from Podemos, and Mertxe Aizpurua of EH Bildu. Lastra put her signature to the document once the vote in Congress concluded on Wednesday, with the approval of Prime Minister Sánchez.

As well as labor reforms, the deal signed with EH Bildu also included a section on local administrations, giving councils greater spending powers to deal with the “social effects caused by the Covid-19 crisis.” The text specifies that debt levels for the Basque Country and Navarre regional governments “will be established exclusively according to their respective financial situations.”

Conceding this point to EH Bildu, just weeks ahead of regional elections in the Basque Country, may have a negative effect on the relationship between the more mainstream Basque party PNV and the central government, in particular given the fact that this deal was not made public until after the Wednesday vote – at which the government received the support of the PNV.

The deal will also have repercussions on the government’s relationship with Ciudadanos, which, under new leader Inés Arrimadas, has been moving closer to the coalition government in recent weeks. Indeed, Ciudadanos agreed this week to support the latest extension to the state of alarm, provided that Sánchez requested just a two-week period rather than a month. The move by Ciudadanos was also aimed at ensuring the government did not have to make concessions to the Catalan Republican Left (ERC) in exchange for their support. ERC, which is in favor of an independent Catalonia, has been pushing for a commitment from the government to reestablish talks on the future of the region that had been put on hold due to the coronavirus crisis. Ciudadanos is strongly opposed to Catalan independence, and indeed of any territorial breakup of Spain.

Iglesias’s comments

The confusion deepened on Thursday morning, when Deputy Prime Minister Pablo Iglesias insisted during an interview with Catalunya Ràdio that the agreement “does not speak about a partial repeal, it talks about the repeal of the labor reform. The parties can say what they want. What was signed was what was agreed. The deal between the three parties is to completely overturn the reform.”

But the PSOE on Thursday morning was sticking to the rectification made late last night. Transportation Minister José Luis Ábalos said on the Onda Cero radio network that the key passage in the text had been rectified, but that the deal had not been scraped. Ábalos added that there would be no need to sign a new deal, given that all that was needed was a clarification from the three parties.

EH Bildu, meanwhile, stated that the PSOE had not made a rectification, but rather a “terminological tweak” to the document. “The deal is still in place,” said party spokesperson Mertxe Aizpurua, during an interview on state radio network RNE.

English version by Simon Hunter.