Spanish government mulls second labor reform for 2014

The right wing Popular Party government of Mariano Rajoy was preparing a second round of labor reforms for the new year, Spanish Economy Minister Luis de Guindos said Saturday. Speaking at an event in Catalonia, De Guindos said that the second labor reform, which follows on from the first reform passed in February 2012, would simplify the different work contracts and also make part-time contracts more flexible. "What we did a year and a half ago is giving its fruit, but we need to complete the work of perfecting it in this second reform," said De Guindos. It should be remembered the first reform, which provoked a general strike in Spain, lowered the amount of compensation companies had to pay for laying workers off, from 45 days per year worked to either 30 or 20 days in some cases. Even so unemployment has continued to rise in Spain, with a temporary relief of a record breaking holiday season and still stands at over 25 percent, a figure De Guindos understands is "total unacceptable." De Guindos also spoke about income tax, which currently stands at 21 percent for most earners in Spain, something he says the government will try to change in 2015, which incidentally will be in the run up to the next general elections scheduled for November of that year. "We need to have a much more reasonable rate of income tax ... It needs to be reformed and we need to revert it increase," he said. De Guindos also made reference to Spain's public deficit, which he described as "a hemorrhage which needs to be stemmed", as well as insisting that the government had no plans to alter the current standard rate of 21 percent for sales tax, given that it was more or less in line with the levels in other EU countries. Finally he said he was "convinced" that Spain's economy would grow in 2014, although De Guindos insisted that the deficit still needed to be reduced and the reform of Spain's banking system completed.