Less than two months remain for the government to re-certify the unemployment benefit reform in connection with the fourth payment from European recovery funds. A payment of €10,021 million could be at risk if delays occur.
The deadline ends on 20 March, the date set by the European Commission to assess milestones for the fourth payment. Spain requested this on 20 December. This comes just days before Congress votes against the reform bill, with opposition parties PP, Vox, and Podemos.
Two months are typically allotted for these evaluations, but Brussels has extended the period to three. It is understood that unemployment benefits may be included if the payment arrives on time.
Spain could receive additional time, potentially extending beyond three months, because community rules allow such extensions when there is an agreement with the country in question.
Another option is a partial payment that reduces milestone non-compliance, though the EU expects a clear assessment by the economic vice president. Valdis Dombrovskis indicated it was premature to discuss this possibility.
Labor will negotiate with social actors first
The Ministry of Labor had invited employers and unions to negotiate the reform on Monday, January 29, but the meeting was postponed for a week because Labor Minister Joaquín Pérez Rey, who usually negotiates with social actors, accompanied the delegation to Mexico alongside the second vice president, Yolanda Díaz.
The Labor Party aims to shape this reform with input from social representatives, based on the text approved by Congress, and then seek parliamentary support.
The government decree-law expanded the subsidy to groups previously exempt, including those under 45 and those without family responsibilities.
It raised the subsidy from 480 euros to 570 euros for the first six months and from 540 euros for the next six months, with the first 180 days allowing work flexibility.
However, the reform reduced excessive pricing in Social Security Support for citizens over 52. Implemented in 2019 to shield this group’s future pensions, the policy has evolved yearly, eventually moving toward 100% of the minimum interprofessional salary by 2028.
This adjustment sparked a split, with five MPs voting against and tipping the balance in favor of the reform not passing. Social dialogue sources acknowledge the difficulty of redirecting talks and overcoming the political obstacle posed by Podemos; this contributed to a decision not to pursue any significant cuts.
Labor is pushing to preserve a plan reached through months of discussions with the Ministry of Economy and a consensus within the government. In 2018, the minimum wage stood at 735.9 euros per month, and as Yolanda Díaz described it, a legal fiction had to be created to bridge the gap with average salaries, a gap that no longer exists today.
Díaz illustrated that an active worker earning 20,000 euros a year contributes less than a 52-year-old beneficiary of the subsidy, a discrepancy that needed correction without discouraging employment. Podemos argues that the reform amounts to a cut in contributions for those people, which could translate into lower pensions in the future.