UPDATE 2-Spanish govt to present labour reform on June 16

* Reform to go to parliament for vote without amendments

* Socialists face collision with unions, traditional allies

(Adds meeting, paras 8 and 9)

MADRID, June 2 (BestGrowthStock) – Spanish Prime Minister Jose Luis
Rodriguez Zapatero said on Wednesday the government would
present long-awaited labour market reforms on June 16 whether or
not it had reached a deal with unions and employers.

“The government will approve the labour reform at a cabinet
meeting on Wednesday, June 16, whether or not there’s an
agreement,” Zapatero told reporters.

“Labour reform is needed to contribute to job creation,
reduce unemployment and boost our labour market,” he said.

The proposed reforms will then go to parliament for a final
vote, without amendments.

Economists consider labour market reforms, along with bank
restructuring and reducing the deficit, essential to solving
Spain’s long-term economic problems and pulling the country out
of its worst recession in decades.

Government talks with the unions and business leaders have
been going on for months.

Imposing a deal without the unions’ agreement would probably
set the ruling Socialists on a collision course with their
traditional allies at a time when Zapatero could use their

The government, unions and business leaders said in a joint
statement they had met again on Wednesday and were nearer to
reaching an agreement.

“The meeting has allowed for advances on some issues that
have been subject to negotiation, and it has been agreed to
continue the process with the aim of drawing closer and reaching
an accord on labour market reforms,” the three parties said.

Spanish companies have long complained that burdensome
hiring and firing costs discourage recruitment, pushing up the
unemployment rate to 20 percent in the first quarter, the
highest in the eurozone.

Unions are keen to avoid any erosion of the benefits of
workers already protected by long-term contracts.

With growing political opposition at home, Zapatero’s
ability to push through reforms is in question.

A 15 billion euro ($18.35 billion) austerity plan passed by
the cabinet and presented in a similar way scraped through
parliament by just one vote on May 27. The narrow margin
prompted speculation that Zapatero might be forced to call early
elections if his 2011 budget proposal, due in September, was

Economy Minister Elena Salgado said on Monday the government
planned to complete the entire labour reform process by the end
of June.

Investing Research
(Reporting by Paul Day; Editing by Sonya Hepinstall)

UPDATE 2-Spanish govt to present labour reform on June 16