Garbage disposal

THE EURO ZONE ·
There was certainly haggling over the 2022 spending plan, but it wasn't generated by debate about the document's fiscal proposals

Mark Nayler

Friday, 31 December 2021, 12:37

After resolving a seemingly irrelevant dispute with opposition parties about Netflix, Spain's coalition government this week managed to secure approval for its 2022 budget, in which the first tranche of post-Covid EU funds will be deployed. Though unprecedentedly generous in its public spending, the blueprint's contents were never especially controversial, unlike those of a decree also issued this week, which is likely to have a tougher time in congress early next year.

There was certainly haggling over the 2022 spending plan, but it wasn't generated by debate about the document's fiscal proposals. Rather, pro-independence parties such as Catalonia's ERC and the Basque country's EH Bildu know they can charge a price for their votes in congress, even if they're in concord with what the government's trying to do. Hence the squabble over Netflix content referred to earlier - an issue that has nothing whatsoever to do with the budget.

Spain's opposition parties are probably also reluctant to be seen as blocking the disbursement of Brussels' Covid handouts, even if a lot of that money is going to projects that are, at best, only tenuously to do with post-pandemic recovery. The result of this cross-party wrangling, at least for Catalonia's separatists, has been a resounding success: the wealthy northeasterly region will receive an even bigger chunk of state expenditure in 2022 than it did this year, and its leading separatists, despite only occupying twelve seats in congress, have once again played the role of kingmakers.

Also approved this week - although only by the cabinet, not congress - are the government's long-awaited reforms to the labour market. Unveiled at the last minute, just before the end-of-year deadline specified by the EU, these are the creation of employment minister and second deputy prime minister Yolanda Díaz, whose future and reputation hinges on their success. Unlike the budget, though, this far-reaching legislation IS likely to generate disagreement and discord in parliament, even amongst an opposition as subdued as Spain's.

Díaz's proposed reforms are the first substantial, potentially long-lasting, piece of legislation formulated by the government of which she is part. Perhaps most significantly, she has given more negotiating power to the unions, greatly reduced under the previous Conservative administration of Mariano Rajoy, and put a three-month limit on temporary contracts, which currently account for one in every four signed in Spain. In a memorable soundbite, Díaz dedicated her flagship changes to the women and young people in Spain "who have never in their lives known a contract that wasn't garbage".

There's one final hurdle for Díaz to jump before her labour reforms become part of Spain's legislative machinery, and that's a vote in congress next month. Expect resistance from Pablo Casado's Popular Party (the party responsible for the very reforms Díaz is reversing) and perhaps from centrist Ciudadanos, too. And perhaps also from kindred spirits on the left, keen to extract a fee for their support.

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Garbage disposal

THE EURO ZONE · There was certainly haggling over the 2022 spending plan, but it wasn't generated by debate about the document's fiscal proposals

THE EURO ZONE ·
There was certainly haggling over the 2022 spending plan, but it wasn't generated by debate about the document's fiscal proposals