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Surprise all round as 2012 labour reform looks set to be axed in return for political support

Prime minister Pedro Sánchez and coalition partner Pablo Iglesias of Podemos.
Prime minister Pedro Sánchez and coalition partner Pablo Iglesias of Podemos. / EFE
  • Confusion after the announcement revealed another rift in the PSOE-Unidas Podemos coalition government

There was surprise on Thursday from all sides of politics and among business and union leaders over the government's seemingly secret decision to fasttrack the scrapping of controversial labour law reforms by a previous, conservative government.

In return for support in parliament from radical Basque nationalists, EH Bildu, ministers had agreed to end the 2012 reform which is disliked by the Left. EH Bildu's five MPs abstained in this week's state of the alarm vote.

The move was seemingly agreed behind the back of the Ciudadanos and PNV parties, who supported the government in that vote this week, but are against repealing the labour law.

The announcement came from EH Bildu, and was followed by confusion as the PSOE, the main governing party, appeared to backtrack and said only (less-sensitive) parts of the law were going to be culled up front.

This statement was promptly contradicted by Unidas Podemos, the minority coalition party, who said the agreement had been reached to scrap all of it.

There was an immediate outcry from business leaders and conservative politicians, who view the more flexible labour laws as key to generating jobs.

Unusually, there was upset too in the trade unions, who, while in favour for a long time of ending the law, said that the move should have been discussed more openly.

The 2012 labour law reform makes it easier to change staff working conditions and redundancy cheaper for firms.

Parts of the EH Bildu party were once linked to the political wing of Basque terrorist movement, ETA.