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Spain overhauls labor market, as unions plan general strike

Spain overhauls labor market, as unions plan general strike

Spain's parliament gave final approval Thursday to a sweeping overhaul of the labor market designed to slash soaring unemployment and revive the economy, despite union plans for a general strike.
The new law - which will make it easier and cheaper for employers to hire and fire workers - was slammed by unions as a backward step immediately after its approval by the lower house of parliament.
The government staunchly defended the reforms, which Finance Minister Elena Salgado said "will allow us to climb up the ladder of international competitivity."
The International Monetary Fund has said reforms to its rigid labour market are "absolutely crucial" if Spain is to cut its jobless rate and rein in its massive public deficit.
Spain's unemployment rate has soared to more than 20 percent, the highest in the 16-nation euro zone, following the collapse of the building sector at the end of 2008.
The rise in joblessness has jacked up government spending on unemployment benefits, pushing Spain's public deficit to 11.2 percent of gross domestic product last year, the third-highest in the eurozone after Greece and Ireland.
As the law was passed, several thousand representatives of the country's two main unions rallied in Madrid to prepare for a general strike on September 29.
"Now more than ever a general strike makes sense," the head of the CCOO union, Ignacio Fernandez Toxo, told the rally.
His counterpart at the UGT, Candido Mendez, said the strike would "defend what the country needs" in the face of reforms that are "a step backward on rights and in terms of employment."
However, a poll published at the weekend in the newspaper El Pais said that only nine percent of workers planned to take part.
Bank of Spain governor Miguel Angel Fernandez Ordonez said that while the reform did not solve all of the problems of the country's labor market, it contained "positive advances" which he encouraged firms to take advantage of.
"It is fundamental now that these possibilities of improvement to our production capacity which the labour market reform creates be used to the maximum," he told a business conference in Madrid.