Labor reform passes in Spain

MADRID – Spain’s left-wing ruling coalition on Tuesday secured its hold on power with the approval of a landmark labor reform backed by both unions and employers and a new national spending plan for next year that includes a hefty disbursement of pandemic recovery funds.

An array of left-leaning and nationalist lawmakers gave the final goahead to Spain’s 450 billion-euro ($509 billion) budget for 2022, which allocates more than half of the funds to education, health, pensions, subsidies and other forms of social spending.

The budget includes the first 20 billion euros of 70 billion euros ($79.2 billion) total granted to the country from the European Union’s COVID-19 recovery funds. The European Commission, the 27-nation bloc’s executive branch, transferred to Spain an initial tranche of 10 billion euros ($11.3 billion) this week.

The budget approval is seen as a crucial test of the parliamentary support of the minority coalition of Socialists and the anti-austerity United We Can party. By clearing the hurdle in a 281-62 vote with one abstention, Prime Minister Pedro Sánchez dispelled pressure to call an early election.

His Cabinet also passed Tuesday a decree that overhauls the country’s labor rules, a commitment by Sánchez’s government with the European Commission before the end of 2021 in order to secure the next installment of EU pandemic funds.

The labor reform reverses businessfriendly regulations adopted in 2012 by a previous conservative administration at the height of last decade’s sovereign debt crisis.