Employers association breaks off talks with government over deal with Basque radical party

Surprise agreement with EH Bildu committing to repealing a 2012 labor reform has triggered a chain reaction of criticism from politicians and social agents alike

PM Pedro Sánchez signing an extension to the ERTE temporary layoff scheme in the presence of employer association leaders on May 11.
PM Pedro Sánchez signing an extension to the ERTE temporary layoff scheme in the presence of employer association leaders on May 11.EFE

Aside from attracting the widespread condemnation of the political opposition, a deal signed yesterday between Spain’s coalition government and Basque radical left party EH Bildu has had more tangible consequences for the executive.

Spain’s largest employers association, the CEOE, today broke off talks with the Socialist Party (PSOE) and Unidas Podemos administration, in protest at the agreement that committed to repealing a labor reform introduced in 2012 by the then-Popular Party government, and that, among other measures, made the Spanish job market more flexible by lowering the cost of firing employees.

The agreement was signed last night by the PSOE, Unidas Podemos and EH Bildu in exchange for the latter party’s abstention at a vote by lawmakers in the Congress of Deputies to extend Spain’s state of alarm by another two weeks. The government has been arguing that the exceptional circumstances, first implemented on March 14, are still essential for limiting mobility during Spain’s coronavirus deescalation phases, which are being implemented asymmetrically across the country.

The commitment to overturning the 2012 labor reform was included in the governing deal signed by the PSOE and Unidas Podemos ahead of the formation of the coalition government earlier this year. The deal signed with EH Bildu on Wednesday specifically committed to repealing the entirety of the legislation before the end of the exceptional measures in place due to the coronavirus crisis. Late last night, the PSOE offered an “explanatory note” and watered down that commitment, saying instead that it would recover “the labor rights taken away by the 2012 labor reform” rather than an outright repeal.

At around the same time as the content of the deal with EH Bildu was made public, a social dialogue meeting was just finishing, an encounter that aimed to study extending furloughing schemes – known in Spain as ERTEs – implemented during the coronavirus crisis beyond June 30. One of the participants at that meeting was the CEOE, which, during a video conference meeting today, decided that it is suspending talks with the government, due to what it described in a statement earlier in the day as its “major irresponsibility” and “shocking contempt for social dialogue” for having committed to repealing the 2012 labor reform with EH Bildu.

A meeting that was scheduled today between the CEOE and Spain’s social security minister has already been canceled. The aim of the encounter was to examine the government’s plans to introduce a minimum basic income scheme, which is aimed at protecting family units living in poverty.

PSOE explanations

Meanwhile, Adriana Lastra, the PSOE spokesperson in Congress and the signatory of the EH Bildu deal for her party, said today on Spanish TV network La Sexta that the group was “surprised at the interpretations of the document agreed with Bildu.” She went on to say that the PSOE was not signing anything different from what had already been agreed with Unidas Podemos. “But logically nothing will take place without social dialogue,” she continued. “But yesterday what we were voting on was the extension of the state of alarm, and there was a lot at stake. We want to save many lives,” she said, justifying the deal on the basis that it helped ensure that the state of alarm would be extended. That said, if EH Bildu had voted against the measure, the government still would have won the vote.

“All of the parliamentary groups know that we are negotiating with many people because we need the state of alarm to continue, because we have the PP, [far-right] Vox, ERC [the Catalan Republican Left], the CUP [a small Catalan separatist party] and [left-wing Valencian bloc] Compromís voting against… The priority of the PSOE was to get the state of alarm passed.”

Lastra continued by saying that the explanatory note was released by the government “when we saw that the CEOE and the Cepyme [a confederation of SMEs] was interpreting something different. Every step that this government takes, it does so hand-in-hand with social agents. With the unions and business leaders.”

Reaction of Ciudadanos

Meanwhile, center-right party Ciudadanos (Citizens), which fiercely opposes independence for Spanish regions such as Catalonia or the Basque Country, said today that it was still open to negotiating with the government, despite being blindsided by the pact with EH Bildu.

Ciudadanos lent its support to the government yesterday at the vote to extend the state of alarm, partly in order to ensure that the PSOE-Unidas Podemos coalition would not have to make concessions to the Catalan Republican Left (ERC) in exchange for votes from its lawmakers at the debate on Wednesday. The ERC is pushing for talks on the future of the Catalonia region to restart, despite the ongoing coronavirus crisis. Ciudadanos was unaware that the government had signed the deal with EH Bildu – which also wants independence for the Basque Country – and was surprised to learn of its existence.

But despite anger among the party’s ranks today, a spokesperson for the group, Edmundo Bal, said today during press interviews that it would continue to negotiate with the government on a case-by-case basis, making clear that “we are not partners in the Frankenstein government,” a phrase that refers to the assortment of parties that have to unite in order for the minority government to be able to pass legislation.

With reporting by Manuel V. Gómez, Miguel Ángel Noceda and Elsa García de Blas.

English version by Simon Hunter.

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