Green light for new unemployment protection measure

In September 2009, the Spanish parliament approved a new €420 monthly unemployment payment, to be granted to people whose unemployment benefit has ceased since 1 January 2009. The measure has secured the support of almost all political parties and the trade unions, although the Popular Party referred to it as a palliative measure that will not help to boost employment.

On 17 September, the Congress of Deputies (Congreso de los Diputados), Spain’s lower house of parliament, approved a new payment for unemployed people whose unemployment benefit has ceased after 1 January 2009. The payment amount will be equal to Spain’s current Public Indicator of Multiple Effect Income (Indicador Público de Rentas con Efectos Múltiples, IPREM) – that is, €420 a month. Following an intense month of negotiations between the government, trade unions and left-wing parties, the measure – which was processed as a parliamentary bill – finally won the support of all parliamentary parties. Only the minority party Union, Progress and Democracy (Unión Progreso y Democracia, UPyD), which has only one seat in the parliament, did not vote in favour of the bill. The negotiations resulted in changes being made to certain aspects of the bill, which was initially approved by the Council of Ministers as a royal decree.

Details of negotiations

The differences that arose between the government, the trade unions and the left-wing parties related to the duration of the benefit and the criteria for accessing it. The initial government proposal stipulated that only those whose unemployment benefit had ceased after 1 August 2009 would be entitled to the new benefit. The government further proposed that the benefit would be limited to 180 days, with the possibility of extending it if the country’s unemployment rate rises above 17%. The left-wing parties and trade unions, on the other hand, had been demanding that the benefit be extended to all unemployed people whose benefit had ceased. They also wanted to change the criterion for extending the payment beyond the initial 180 days – that is, whereby the rate of unemployment must exceed 17% – introducing more flexible indicators related to the general recovery of the economy and the employment situation.

Final provisions agreed upon

In the end, the final approved bill was agreed upon, stipulating that any unemployed person can access the new benefit if their unemployment benefit has ceased after 1 January 2009. The payment will be granted for a maximum of six months or 180 days and will be available up until 15 February 2010. Entitlement to the benefit will be conditional on the unemployed person taking part in a training programme – this initiative will include measures such as career guidance, attending job interviews, training measures and help with writing their curriculum vitae (CV).

Response to new measure

The approval of the bill has generated a wide range of reactions from political parties and social actors. The left-wing political parties have expressed satisfaction about the increase in the number of unemployed people potentially covered by the measure, which should rise from the 40% estimated under the initial proposal to the 85% eligible under the final agreement. The main trade union confederations, including the General Workers’ Confederation (Unión General de Trabajadores, UGT) and the Trade Union Confederation of Workers’ Commissions (Confederación Sindical de Comisiones Obreras, CC.OO), have welcomed the benefit being extended in the context of the budget deficit – although CC.OO expressed regret that it does not apply to workers who have stopped receiving the agricultural subsidy and agricultural income (renta agraria).

On the other hand, in spite of voting in favour of the measure, the main opposition party, the Popular Party (Partido Popular, PP), criticised the law, referring to it as a palliative measure that will not help to boost employment in the long term. Meanwhile, the main employer organisations – the Spanish Confederation of Employers’ Organisations (Confederación Española de Organizaciones Empresariales, CEOE) and the Spanish Confederation of Small and Medium-sized Enterprises (Confederación Española de la Pequeña y Mediana Empresa, CEPYME) – have not commented on the measure, having had their labour market reform proposals rejected. For its part, the government considers the measure to be fair, calculating that some 700,000 people will be eligible to apply for the scheme and that it will cost in the region of €1.34 billion – that is, €700 million more than had been estimated for the initial proposal.

Commentary

It should be noted that, up until November 2009, only those whose unemployment benefit expired in August are entitled to apply. This provision is attributed to delays involved in amending the initial royal decree and in processing it as a parliamentary bill.

Pablo Sainz de Miguel, CIREM Foundation

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