The IMF has urged Spain to continue its neo-liberal reforms, in an indication of concern that elections in the fall could deliver a more progressive government than the current regime of Mariano Rajoy.
It is calling for the part-privatisation of health and education, through ‘co-payments’ for services. It also wants to see further deregulation of the labour market that has already created a huge precariat, and for wages to be kept down.
Unions slammed the IMF’s attack on workers and essential public services
Copayments, designed to cut the deficit in line with EU targets, have already been introduced in party of the health system, they point out, saying: “The IMF should to its homework. Copayments have hurt many people, especially the chronically ill and pensioners,’ said Fernando Molina, leader of the health section of the CSIF union.
‘Copayment is not a correct way to finance health services because we already pay for them with our taxes. It is wrong and it not fair”, added Pilar Navarro, federal secretary of health and social services of FSP-UGT union,
Marciano Sanchez Bayle of the anti-privatisation campaign group, the Federation of Associations for the Defence of Public Health, described the proposals as ‘ barbaric because they are measures that harshly ‘penalize’ people with health problems and few health resources.
José Martínez Olmos,spokesman of the opposition socialists, argued the introduction of new co-payments would undermine the Spanish health services as they ‘make sense when there are no barriers to access and quality is guaranteed.’
Spain emerged in 2013 from five years of on-off recession, with economic output expected to grow by 3.3 percent this year – more than twice the average predicted for other eurozone countries.
Rajoy claims the upswing is down to sweeping anti-worker measures adopted in 2012 that made it easier for employers to fire their staff and a clamp down on unions’ ability to negotiate collective bargaining agreements.
Low global oil prices and a weaker euro had also helped Spain, the IMF said in a report published Friday, adding, however, that these effects may dwindle in the next few months.
Moreover, in a common refrain to keep countries from challenging the power of global capital and the banks, it said it was still vulnerable to “external contagion,” such as from problems affecting debt-laden Greece.
So in a bid to stay ‘competitive’, to continue its strong export performance, Spain must continue further wage restraint, it says.
The labour reform introduced by Rajoy in February 2012 cut severance pay for permanent workers from 45 days of wages for each year of service to 33 days, and the maximum amount from 42 months’ salary to 24 months. It also introduced a series of so-called ‘objective causes’ such as falling sales and technological and organizational changes that allow companies to lay off workers en masse with severance pay of only 20 days’ wages for every year worked, up to a maximum of one year’s salary.
The Paris-based OECD recently recommended that the government rein in the discretionary power of labour courts to declare dismissals null and void to ‘extreme cases.’
Wage devaluation has pushed Spanish salaries further away from the euro zone average, a recent European study shows. In 2014, Spanish workers were making an average hourly rate of €15.70, or 27.3 percent less than the €21.60 average in the group of countries with the common currency. Seven years earlier, in 2008 – when the economic crisis began – that difference was 24.3 percent, according to an analysis of companies with 10 or more workers conducted by Eurostat, the European statistics bureau.
If wages have fallen, unemployment remains stubbornly high; at 22%, second highest in the EU after Greece, with many of the new jobs created insecure and low paid, or ‘trabajo basura’ as the Spanish say. And both the poor quality of jobs and the high number of jobless is in fact a real drag on growth, as this means Spanish workers have less money are more cautious about spending it, depressing the domestic economy, making Spain over-dependent on bouyant export markets that may, in future, sink.
The main opposition Socialists and the upstart Podemos party who will challenge the Popular Party in general elections in November have pledged to reverse Rajoy’s regressive labour reforms and protect public services.
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