Spain passes landmark labour reform, unlocking billions in EU aid

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The Spanish parliament has ratified by one single, mistaken vote a landmark labour reform devised by the country’s Socialist-led coalition government, unlocking billions of euro in European Union aid.

At the end of a messy ballot, the main party in the conservative opposition said that one of its deputies had erroneously voted in favour of the reform.

The Popular Party said that the parliament’s speaker refused to revert the result despite the party’s complaint.

Nine smaller parties joined the Socialist party and its junior coalition partner Unidas Podemos (United We Can) to vote in favour of the law passed by the cabinet at the end of December.

The cross-party support gave the bill a 175-174 victory over mostly conservative opposition parties.

The minority coalition government controls just 155 of the 350 seats in the Congress of Deputies, Spain’s parliament.

The government negotiated the law with trade unions and employers, who both backed it.

Its approval meets a commitment made by prime minister Pedro Sanchez’s government to the European Commission, enabling the eurozone’s fourth-largest economy to collect its next instalment of EU pandemic recovery funds.

Labour reform has been a banner issue for Mr Sanchez’s administration. It reverses some of the business-friendly regulations adopted in 2012 by a previous conservative administration at the height of the sovereign debt crisis.

The new employment rules limit most temporary contracts to a maximum of three months and bring back collective bargaining with unions as the main way of negotiating pay and conditions.

Short-term and temporary job contracts are largely blamed for job insecurity in Spain, especially among young people who are also hit by high unemployment.

In November, the jobless rate among people under 25 years of age was 29.2%. The national rate was 14.1%, compared with the 19-country eurozone average of 7.2%.

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