Spain close to ratifying labour reforms designed to cut rising unemployment

SPAIN’S parliament is expected today to ratify labour reforms seen as key to restoring economic health to a country crushed by unemployment, giving breathing space to the jaded ruling Socialists.

A €15bn (£12.5bn) austerity bill managed to scrape through parliament last month by just one vote, narrowly averting a vote of no-confidence for Prime Minister Jose Luis Rodriguez Zapatero as he tries to calm market worries about Spain’s weighty deficit.

However, approval for labour reforms should prove easier to secure than for the austerity measures, since parliament will still be able to debate and pass amendments on the decree. The government forced through the austerity package without an option for amendments by other political parties.

The reforms include measures to cut the cost of firing, one of the highest in the developed world, simplify contracts and promote youth employment. One in five people in Spain are currently jobless. The labour reform was introduced by decree last Thursday but still needs to be ratified.