Spanish unions reject budget adjustment demanded by EU

A June protest by union members in Madrid

A June protest by union members in Madrid

Spain’s two biggest unions said on Thursday that they “firmly opposed” measures demanded by Brussels to reduce the public deficit and demanded a hike in the minimum wage.

“We firmly reject the adjustment of €5.5 billion demanded by the European Commission,” the head of the UGT union, Pepe Alvarez, told a joint news conference with Ignacio Fernandez Toxo who heads the nation’s biggest union Commissiones Obreras.

Spain had agreed with Brussels to reduce its public deficit from 5.1 percent of gross domestic product (GDP) in 2015 to 4.6 percent this year and 3.1 percent in 2017.

But the draft 2017 budget which Prime Minister Mariano Rajoy’s conservative government sent to Brussels last month forecasts a public deficit of 3.6 percent this year.

The European Commission responded by demanding that Madrid adopt additional measures to lower the deficit down to 3.1 percent, which will require roughly 5.5 billion euros ($6.1 billion) in spending cuts and tax increases.

“It is essential that Spain get at least an additional year of flexibility to adjust its public accounts,” Toxo said.

That would give Spain until 2019 to bring its public deficit below the EU’s limit of 3.0 percent of economic output. The country has already been granted another two years to bring the deficit below the limit.

The two unions also demanded that the monthly minimum wage be raised from €764 to €933.

Rajoy won a parliamentary confidence vote on October 29th, taking power after two indecisive elections that led to 10 months of political paralysis.

But this time around he has a minority government and will need to scrabble for approval from other opposition parties further to the left to win approval in parliament for legislation.

Published The Local 10 Novernber 2016

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