The Ministry of Finance and Public Function begins negotiations this Wednesday with unions to determine how to implement salary adjustments for public sector workers. Unlike previous years, discussions between the ministry leadership and the team led by María Jesús Montero aim to reach a cross- sector agreement that can balance scattered income requests across public administrations, public agencies, and the private sector. All employers and unions are watching closely as they await a government reference point within a framework that has struggled to coalesce into a single, coordinated proposal for the moment.
Employers are urging restraint from the government to avoid setting a precedent that could complicate hundreds of pending collective agreements. Public sector entities face a delicate balancing act: signaling that increases are possible while recognizing that higher state spending reduces room for other policy measures aimed at protecting the most vulnerable groups.
The process is unfolding with a sense of urgency as negotiators prepare for a first round of talks this Wednesday. While the private sector faces disagreements over how to distribute inflation costs, both sides criticize the government for not moving swiftly enough to facilitate a compromise. Ahead of the draft General Government Budgets, the Executive will need to present a clear position on how much more salaries should rise in response to a double-digit CPI, and what portion the public payroll can reasonably absorb without compromising other public services.
This year, civil servant salaries rose by 2 percent after the Treasury failed to secure an agreement with the three main unions in the sector. The unions refused to settle for a figure below the average CPI for 2021, which stood at 3.2 percent, resisting a perceived erosion of purchasing power. Although inflation seemed temporary to many at the time, its persistence has led all parties to expect ongoing negotiation rather than a one-off settlement.
To mitigate the impact of this year’s purchasing power decline, the plan includes a multi-year framework intended to compensate part of the deficit in future years. People familiar with early talks between the Treasury and the unions say the government could offer around a 10 percent increase spread over three years. While this may be viewed as modest for the current year, it promises higher increases in the following two years, smoothing out some of the near-term discomfort.
Waiting for a Reference Point
“This will serve as a benchmark,” said the head of a major business federation in reference to officials’ salaries and tenancy-related terms. In fact, the 10 percent figure under discussion for public servants is not far from the levels already being debated in ongoing sector agreements. The principle behind wage negotiation remains that collective bargaining is independent from any unilateral government imposition.
The most recent notable development concerns the hospitality sector in Catalonia, where roughly 300,000 workers are covered by a renewals package that envisions a 9 percent increase (distributed as 4 percent + 3 percent + 2 percent) through 2024. Unity among unions has been mixed: some signatories supported the deal, while others, including the main federations, chose to distance themselves. The emphasis remains on restoring purchasing power lost in the past years and evaluating whether progress is enough in the broader context of labor market competition.
One recurring obstacle in private-sector negotiations is the absence of a salary review clause. Unions, including the two largest, demand clauses that guarantee adjustments in line with or beyond the inflation rate for the year. Employers, in turn, resist such clauses, arguing that they would impose structural costs on companies as they close annual accounts. This disagreement over salary reviews fuels pause and slows momentum across many contracts up for renewal.
In several negotiations that affect large groups of workers, including clerical and administrative sectors in Catalonia, employers have proposed multi-year increases, while unions push for higher totals and a built-in mechanism to revisit pay if inflation remains elevated. When a salary clause is absent, it becomes a central sticking point that can derail deals and delay improvements in pay and working conditions. The ongoing discussions reflect a broader national pattern where different regions and industries seek to reconcile immediate pay rises with long-term budgetary discipline.
Ultimately, the outcome will hinge on a careful assessment of fiscal space, inflation expectations, and the political will to protect essential public services while recognizing the reality faced by workers. Negotiators will need to translate high-level principles into concrete figures that satisfy both sides and can withstand scrutiny as the government moves forward with its budget plans for the coming years.