The Governor of the Bank of Spain supports extending the ERTE but asks Daz not to repeal the labor reform

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Thursday, July 23, 2020 – 3:04 PM

The Bank of Spain considers that the economy needs a second extension of the ERTE and guarantees to companies as demanded by the CEOE and unions. At the same time, its governor, Pablo Hernndez de Cos, has directly asked the Minister of Labor, Yolanda Daz, to resign from repealing the labor reform.

Yolanda Daz and Pablo Hernndez de Cos today at the Economic and Social Council (CES).

Pablo Hernndez de Cos, Governor of the Bank of Spain, has agreed today with companies and unions that it will be necessary to extend the guarantee schemes and ERTE beyond September 30, but at the same time he has addressed the Minister of Labor Yolanda Daz to expressly ask it not to withdraw the ability of companies to make adjustments that allow them to survive, a capacity granted by the labor legislation that Daz has indicated it wants to repeal.

Hernndez de Cos and Daz have coincided in the presentation of the annual report of the Economic and Social Council (CES) together with representatives of social partners such as Unai Deaf (CCOO) o Rosa Santos (CEOE) and Pedro Fernndez Aln (Cepyme). The governor of the supervisory body has recalled the severity of the crisis caused by the coronavirus, warning that the recovery may not be intense enough to avoid “structural” damage to the economy. In this regard, he praised the measures taken so far and stressed that The current stage of the crisis is much more difficult to manage.

“We must be open to extend the guarantee programs and the ERTE if necessary,” he said, referring to the second extension of the schemes that employers and unions demand. “But this support must be combined with ensuring the correct functioning of the different labor flexibility mechanisms available to companies, the function of which is especially useful in these circumstances to efficiently carry out the adjustments derived from the crisis.”

For the governor, the mechanisms of the labor reform in the hands of the companies, accompanied by active employment policies will be necessary so that the employees affected by restructuring from this autumn return to find work as soon as possible because There is no point in maintaining business support that the coronavirus crisis has made unfeasible.

The direct allusion to the labor reform that Daz has promised to repeal and that the unions consider should be started in September in a “postponable” manner has not been answered by the Minister of Labor, who nevertheless has Called “Don’t Be Afraid” to Extend Temporary Employment Regulation (ERTE) Records beyond September for as long as “necessary”, since “there would be no point in dropping the system” if necessary after the high investment effort.

The lines of guarantees and ERTE in support of companies and workers since March are keeping the productive fabric alive by saving millions of jobs and hundreds of thousands of companies. But at the same time they have a huge cost for the state coffers that the ministries of Economy and Social Security keep a close eye on. For work, Only the benefits of the ERTE have already eaten more than a third of the budget of the body that pays them, the SEPE, and which also has to face obligations with the rest of the unemployed workers. For Social Security, aid to self-employed workers and companies has led to a deficit of more than 2,000 million euros, when just a year ago the situation of the organization was the opposite.

Daz has defended as a great success to have included in the last extension of the ERTE the prevention of outbreaks of the epidemic, a measure that he considers “effective” given the utility registered in the cities and counties that are suffering these outbreaks of contagion.

“I say this with caution, in case this tool is necessary, I want to give you a message of reassurance,” he said, since “after such a large public investment effort, there would be no point in dropping the system if this were necessary.” Daz has stated in a message addressed to employers and unions but also to other members of the government, such as Nadia Calvio or Jos Luis Escriv.

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