The labor reform seen from Brussels: key to the economic recovery and the credibility of Spain

Relations between national governments and European authorities are characterized by indirect messages in a very convoluted language, by almost daily private conversations, by some specific recommendations and, from time to time, messages of a much more political nature. Brussels has a bad reputation, the place where the cuts come from, the bars, but in most cases, the technicians and their bosses only care about the results, the end and not the means.

The way to get there is competition and responsibility of the capitals. That is why it is often difficult to know what Brussels really thinks of something concrete. There is in the institutions, and particularly in the Commission, a vast, heterogeneous corpus of economic paradigms, which are, despite the stigma, surprisingly flexible, ductile. And there is ample ability to twist, adapt and compensate for everything. The annual process, from the analysis of the Budgets to the specific recommendations for each country, is a constant negotiation with their counterparts from each ministry. In concepts and almost adjectives. However, there are other occasions when the general and general opinion of Brussels is very clear., and what surrounds the Spanish labor reform that part of the Government wants to repeal, in its entirety or in its "most damaging parts", is one of them.

The reform of the labor market approved since 2012 by the Government of Mariano Rajoy, under the pressure of the crisis, the market and the authorities pressing for fiscal consolidation, is probably the most far-reaching of those made in the last decade. A unicorn, those rare book structural reforms that the Commission asks over and over to improve productivity and efficiency. And even more so in a field as dysfunctional as the national labor market, which even in the hottest moments of the bubble before the 2008 crisis showed disproportionate unemployment rates, equivalent to those of some countries during the worst of its recessions. Like that of pensions, the two big decisions that made Moncloa regain credibility with partners and creditors.

There are times when you take the pulse of Brussels with the eye of a good cubero, but with the labor reform there are no doubts. "The new government has announced changes in the regulation of the labor market. It is recognized that the reforms adopted in 2012-2013 in response to the crisis have played an important role in promoting the job-rich economic recovery that began in 2014 (. ..) It will be important that any new measure is only taken after a careful evaluation of its potential impact and that the achievements of the previous reforms are preserved, "said the European Commission less than three months ago, in its latest full report on Spain. .

Nobody in the European institutions wants the labor reform to be repealed or reversed to return to what it was before, but what they never do is comment on reforms or counter-reforms before they materialize and there is a legal text, estimates or firm data. It is true that among the technicians who carry the Spanish data there is some concern, because the numbers do not come out, but it is that they will not come out for a long time due to the pandemic and unprecedented indebtedness in a minimum period of time. However, at the political level, the focus is elsewhere. Europe is in its worst recession, with tens of thousands of ports, bankruptcies, the summer season in danger. A parliamentary debate that is settled with incomprehensible and contradictory rectifications does not send a signal of trust and control, but with everything on the table it is, right now, a secondary concern.

Calviño, forceful

Yesterday, Vice President Nadia Calviño was very clear and forceful, opposing opening the melon of the labor reform. She is the interlocutor with Brussels , she has an unbeatable reputation and absolute credibility among those who for many years were her colleagues, including those of opposite political signs. The best example is that in the act in which Calviño called the possibility of repealing now nothing was counterproductive, the Latvian Valdis Dombrovskis , vice-president of the European Commission and the most prominent fiscal hawk participated. And there was no mention in her speech of reforms, the labor market or anything like that. The message that reaches the community capital is that there is nothing to worry about and, for the moment, they pay attention to it. So they have not asked for any explanation .

As ours is the country that has the most unemployment on the continent (after Greece) and the same in youth unemployment, the messages have been constant for 15 years. Community technicians believe that the labor reform helped to stop the bleeding, to create some employment and that without being exemplary, it helped. And keep helping. That is why the petitions have gone over and over again in the opposite direction to what the government wants now, asking to deepen even in some of the pending aspects to face the "segmentation of the labor market" and combat a "duality" that they consider very harmful. Back in 2014, the then commissioner Olli Rehn asked for "additional reforms" in the face of duality and temporality.

The constant quotes from the reports of these years are clear. "The strength of the recovery reflects the impact of the structural reforms implemented in recent years, particularly the labor reform." "The only message we can give is to continue with the reforms and to apply them. Of course we are talking here about the labor market (...) I think we cannot say that there are reasons to be complacent because we are not there yet, but the improvement rate is very high in Spain and that is due to the reforms, "said Belgian Marianne Thyssen, European Commissioner for Employment in the last legislature, on many occasions.

Touching labor regulations again will not affect Spain's access to European funds . There is no direct relationship in this regard in the proposal by France and Germany or between what the Commission is considering. This is common community language, which is already in mechanisms such as the BICC, the embryo of the Eurozone Budget. Receiving direct transfers against the effects of the virus will not depend on something that is concrete on a legal or technical level. But in politics everything counts, and there is no doubt that convincing the most orthodox and skeptical partners to give in is much more difficult if they know that the reforms that they believe have worked best are precisely in your target. Trust is earned over the years and can be lost in just an instant.

In accordance with the criteria of The Trust Project

• Spain
• European Comission
• France
• Nadia Calviño
• Mariano Rajoy
• Greece
• Europe
• Germany
• Unemployment

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