1 Making labour market reform deliver more and better jobs: The Spanish case ETUC Brussels March 2006 Jorge Aragón Comisiones Obreras (CC.OO.-Spain) Labour market reforms and macro-economic policies in the Lisbon agenda

2 The pattern of growth of the Spanish economy Main characteristics Positive High rates of growth (>3% annual rate 5 years) Increase in employment (2,7% annual) Convergence to UE in GDP per person (93%-98% EU-25) Surplus in the public accounts (1% surplus 2005) Negative High inflation (4% -2005) Deficit in the current account balance of payments (7% GDP) Indebtedness of families (110% income) Internal context High level of decentralisation (17 regional Parliaments)

3 External factors Positive Favourable macroeconomic context EU Stable rate of exchange Low rates of interest. Support of the structural funds of EU Negative Increase in the price of petrol Low rate of growth of GDP in the main economic partners of the EU

4 Internal Factors (I) Positive Increase in domestic demand Family expenditure: consumption and investment (homes) Widening productive capacity Increase in the supply of labour: Women Immigrants Social stability; social dialogue Stability in the budget, compatible with: Increase in social expenditure Increase in public investment policies

5 Internal factors (II) Negative Industrial specialisation in sectors with low levels of innovation Low productivity External trade deficit Excessive protagonism of the building sector: homes Increase in inflation Speculation Segmentation of the labour market High levels of fixed-term contracts Lack of mechanisms for the integration of immigrants

6 Bases of social dialogue Consensus on: Improvement of competitiveness Promotion of stability and quality of employment Social Cohesion. Development of social policy Stability and balance of public accounts Two instruments for the agreements Legislation Bilateral agreements General Collective bargaining

7 Structure of the social dialogue Background Bilateral agreements CC.OO.-UGT/CEOE-CEPYME since 1997 Employment stability Structuring of collective bargaining Interconfederal agreements in collective bargaining since 2003 The present process of social dialogue Tripartite Social Agreements: Declaration of social dialogue 2004 Competitivity, job stability and social cohesion Negotiation between: Government, trade unions and employers Agreements on new legislation Bipartite agreements Independent functioning of the different areas of negotiation

8 Main topics in the social dialogue (I) With agreement Regularization of immigrant workers Extrajudicial solutions for labour conflicts Observatories for the modernisation of industrial sectors Prevention of risks and injury at the workplace Vocational training and lifelong training Law for dependent persons Extension of collective agreements Social dialogue in the Public Sector Improvement in the functioning of labour inspection Minimum wage Minimum pension

9 Main topics in the social dialogue (II) With disagreement Law for gender equality Transposition of directive on Implication of workers in the European Company Pending Reform of labour contracts Reform of the general pension scheme Statute of autonomous workers State policies for education, research and development, energy policy Transposition of the EU directive for information consulting for the workers

10 Annual agreements on collective bargaining /\ wages (inflation and productivity) Clauses of wage guaranty Promotion of employment of quality (priority) Articulation of structure of agreements Labour health Equal opportunities Promotion of employment for disabled persons Training

11 Diagnosis There is a direct relationship between the structure of production and the labour market The Spanish economy has strong limitations in the middle term: * Competitivity External trade deficit Inflation Low Research + Innovation * Segmentation in labour markets Quality of employment Training

12 Proposals Take measures towards a cycle of common expansion, and take advantage of the potential of the internal market Cooperative structural reforms (i.e. energy, infrastructures) Avoid fiscal competition Encourage specialization in production more based on innovation Prevent the segmentation of labour markets and job precariousness: Promote equal opportunities and integration of immigrants Role of social dialogue to link macroeconomic policies and the reform of the labour market