Pensions, income contract and economic slowdown: challenges of CEOE election winner

Garamendi and Guinda’s struggle is a work with a ‘David against Goliath’ sound. Since the current chairman of the CEOE officially announced his candidacy, he has managed to show the support of the main regional and sectoral associations within the employers’ association. In fact, although the shadow of an alternative candidate loomed large in the weeks before the election process began, the officialization of his opponent took some business people by surprise. Once the head of Faconauto, Virginia Guinda, vice president of Foment del Treball, decided to jump into the ring at the last moment. Gerardo PerezHe finally announced that he would not apply. And the Catalan has publicly stated that he has no intention of renewing the position by applauding Garamendi in the absence of a candidate.

Guinda sought the support of the industrial sectors and those who were dissatisfied with the leadership profile Garamendi had laid out in his first four years. Catalan hopes to turn the situation around and that associations that support the Basque publicly and covertly will eventually vote for him.

Pensions before 31 December

The CEOE elections have bogged down the dialogue charts of employers with unions and the Government. At the tripartite level, pensions are the most far-reaching reform pursued – unofficially – at the expense of business elections. Escrivá has been negotiating with social partners behind the scenes and without documents since September. And starting next week – after the businessmen have voted – it will formally convene again and present the first draft of the reform. It aims to increase maximum contribution bases as well as maximum pensions. First, it will inevitably lead to a higher cost for employers, who will have to contribute more for higher-paid workers. Higher labor costs that make it harder for employers to have incentives to vote for reform. The winner of this Wednesday’s election must decide and convince the board.

Another openwork folder found on the desk of businessmen is the so-called Rental contract. initiative so far Pedro Sanchez failed to rein in inflation, and without co-ordination between the parties, wage negotiations went one way and government containment measures the other. Employers did not negotiate an income deal to give up some of their job margins in exchange for higher wages, but they also took control of public spending through pensions or public salaries. Even Garamendi has publicly stated that a salary agreement is not necessary.

On this front, the unions will attack the CEOE’s future president. The centers manage to initiate wage increases close to the CPI, where they are strong, especially in industrial settings and large companies. More service sectors and SMEs are having difficulty agreeing on amounts that will not reduce the purchasing power of workers. Therefore CCOO Y UGT They launched a mobilization calendar a month ago, which ended with a big demonstration outside the CEOE headquarters in Madrid. And over the next few months, it promises that the intensity of conflict will increase if agreements between the leaderships are not resolved to agree on some references.

An uncertain 2023

Added to the challenges before the end of the year is the 2023 horizon of great uncertainty. Employment has so far continued and continues to grow at rates higher than just before the pandemic, suggesting that companies expect to continue to be active and expand their workforces to serve it. However, the majority of research institutions have been revising their growth forecasts downwards in recent months. For example, the OECD cut its 2023 GDP forecast for Spain to 1.3% this week. The European Commission estimates 1%, which is half of the Government.

A volatile environment that can worsen due to the war front in Eastern Europe and threatens to complicate companies’ balance sheets. So far, half of the big companies have managed to increase their profit margins despite the price crisis.