The arrival of Jose Luis Escrivá at the Bank of Spain raises the question of how far she will be able to distance herself from the policies designed within a Council of Ministers of which she has been a member since 2020. But there is one area in which she will feel much more comfortable maintaining the line of critical analysis carried out by the banking supervisor: policies focused on employment. Here, it can play a role as a “firewall” to the theses of Yolanda Díaz, whose proposals for dismissals have opened an increasingly evident gap between Sumar and the PSOE.
Historically, the most “controversial” analyses of the supervisor were not those related to the banking situation and monetary policynot even those that cover budgetary stability. The friction between the Bank of Spain and members of the government in recent years focuses on its recommendations in matters of work, wages and pensionsSources from the organization itself consider that Escrivá’s margin for “filtering” or even “softening” the reports is limited, although his public statements and speeches, including his parliamentary appearances, are something else.
Here, Escriva will be responsible for his own words, Although no one expects him to begin his term by focusing on the difficulties related to the sustainability of social security, whose reform he promoted from the Inclusion, Social Security and Migration portfolio. However, it is not excluded that Escrivá, who until his arrival at the Executive had acquired a solid reputation for independence and his own criteria, could surprise and “distance himself” from Moncloa on these and other issues, such as regional financing. , and even questioned his own “legacy” at one point.
There is the precedent of Miguel Ángel Fernández Ordóñez, who in 2006 went from Secretary of State for Finance and Budget with José Luis Rodríguez Zapatero to governor and was critical of the pension and labor reforms. But neither the PSOE nor the executive itself expect this to happen in the short term, although they are aware that the new governor will have to distance himself from the beginning.
This, precisely, can play in favour of the strategy of the socialist wing in economic matters of the Executive, who seeks to put an end to Yolanda Diaz’s proposals, especially regarding its reform of dismissals. An issue in which the PSOE believes that Díaz has played both sides, encouraging a complaint by the unions before the European Committee of Social Rights (ECSR) to justify an increase in severance pay that was declared inadmissible, despite this issue having been explicitly excluded from the agreement on the 2021 labour reform so as not to hinder job creation.
Escriva, who also participated in the last part of these negotiations with Nadia Calviño in a gesture by Sánchez interpreted as a way of thwarting the “protagonist” of Díaz, is considered the most appropriate voice to defend the theses of the PSOE, which does not want to open the melon of a new reform that seems much more complex to agree.
A reform that the Bank of Spain wants
The differences within the coalition government seemed to have been bridged after the elections with a “minimum” commitment in the investiture agreement that allowed Sánchez to form a new “progressive” government with Sumar (outside Podemos). The text speaks of “establishing guarantees for workers against dismissal, respecting the European Social Charter and strengthening causality in the event of termination of the employment relationship”. But this formulation is too ambiguous and the PSOE does not see the need to make dismissal more costly, as Díaz explicitly states.
The Bank of Spain has always placed a red line on the cost of compensation and is specifically advocating a “review of causality”, an issue on which the current executive never finishes entering. Partly because moving forward with this clarification of the justification for dismissal can be interpreted as a way of making it cheaper.
And the compensation for a proper and justified dismissal is set at 20 days (a limit that neither the PP, the PSOE nor Sumar have considered increasing). However, a good part of the companies follow the easier path for them of carrying out disciplinary dismissals that, after the workers’ report, are declared inadmissible with higher compensation. This is why Díaz focuses on these hypotheses, the most expensive but also considered the most common.
What the Bank of Spain is proposing, in a few words, is to avoid the abuse of disciplinary dismissal as a secret formula for “express” dismissal. A question that has been pending since the 2012 reform (which reduced the maximum compensation from 45 to 33 days per year)
In the PSOE, it is remembered that Escrivá, in fact, has been Díaz’s “firewall” since he took over the leadership of Inclusion in 2020, a newly created department born to wrest competition in pensions for the first time in history, very sensitive in electoral terms to a Ministry of Labor that fell into the hands of Unidas Podemos.
In this sense, promoting today the debate on a reform that clarifies the dismissal and brings Spanish labour legislation closer to European legislation, but that looks beyond the cost (neither to increase nor to reduce it), would be well received in the economic and social sectors in Brussels, but also d.would give legitimacy to the socialist wing to design a less populist and, in their opinion, more effective standard. Especially at a time when relations with Diaz are at a complex point.
Diaz’s dangerous weakness
The turbulent reform of subsidies was a particular contributory factor, which meant that the last confrontation between Díaz and Calviño before his departure to the EIB ended up being reversed in Congress with the vote of Podemos (which thus demanded its “revenge”) and the criticism of the unions for the lack of negotiation. This showed the parliamentary weakness of the executive and forced the Labor Party to rewrite the text to maintain the retirement aid for those over 52 (even if it is considered an incentive for early retirement).
What happened with the subsidies showed the PSOE that it needed the support of social dialogue to keep its promises on labor. This explains the “Copernican turn” in the negotiation of the reduction of working hours, also a legislative commitment of the coalition government, but which had led to a head-on clash between Yolanda Díaz and the CEOE. The Minister of Economy, Carlos Body, who had until then avoided friction between the economy and labor, was forced to intervene publicly to channel a dialogue that included the employers’ association.
If the summer also showed something clear, it is that coordination between the socialist ministries and Sumar is conspicuous by its absence, as became clear with what happened with the “erroneous” repeal of the shield against and the dismissal of people who asked to adapt their working hours or to be able to telework in order to be able to conciliate.
Although after having read the text of the ECSR resolution, which considers that the compensation for redundancies in Spain is contrary to the European Social Charter, the PSOE and Sumar have decided to suspend this issue until the issue of the reduction of working hours is resolved, in Moncloa they know that this is only a temporary truce: an agreement on hours that includes the CEOE will not be the one desired by the electorate of Díaz and This will force the Minister of Labour to do everything possible to make layoffs more costly.
On the other hand, there are Sumar’s poor electoral results, which have led Díaz to take a step back in the political leadership of a party whose scope is uncertain, since its role within the Government and the parliamentary group remains intact. And this is a warning signal for the socialists, who see that the political charisma of the Galicianbased on his management as Minister of Labour, has been unclear.
And this forces him to “radicalize” his proposals to recover an electorate that, despite the labor reform, continues to exceed 11% unemployment and where the perception of the real quality of jobs has not improved as much as Sumar promises. And above all, he does not forget the unfulfilled promise to repeal the reduction in severance fees introduced in the 2012 PP labor reform.
