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REFILE-FACTBOX-Policies of Spain's People's Party

Source: Thomson Reuters Foundation - Sun, 20 Nov 2011 11:05 AM
Author: Reuters
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Nov 20 (Reuters) - Spain's centre-right opposition People's Party (PP) is expected to win a landslide victory over the ruling Socialists in Sunday's election.

Following are key policies the party is expected to implement:

LABOUR MARKET REFORM

* The PP plans to cut the number of days per year worked to calculate severance pay for lay-offs in about half from the current 33-45 days.

* Reform collective bargaining to delink wage increases from inflation, set productivity as a benchmark for wage hikes and negotiate wages on a company-by-company basis rather than on the current industrial sector basis.

* Introduce a single, flexible work contract to replace the existing range of contracts regarding job benefits and severance pay.

BANKING REFORM

* The PP plans to force banks to mark property assets to market price and then recapitalise the banks which are left with a big hole.

* It could seek funds for the recapitalisation from the European financial rescue fund.

* Further consolidation in the banking sector is also on the cards to reduce the number of banks after the ruling Socialists forced weaker savings banks to merge.

ENERGY SECTOR REFORM

* The PP is likely to slash subsidies for wind and solar power as the euro zone debt crisis makes funding very expensive.

* Promoting smart power grids and meters to match demand with quick-changing supplies of renewable energy.

* Keeping nuclear plants running for as long as the regulator deems they are safe.

* Possible windfall tax on cheap nuclear power in exchange for an extension of the life of the power plants.

BUDGET REFORM

* Spain's challenge is to stick to deficit targets agreed with Europe, aimed at allaying fears it will need a bailout like Greece, Ireland or Portugal. The 2012 budget drafted by the Socialists has not been debated or approved by parliament. The PP will have to pass the final 2012 budget.

* The draft 2012 budget sets a spending cap for the central government of 117 billion euros, 3.8 percent below the 2011 cap.

* The PP has said it is sticking to a public deficit target for 2012 of 4.4 percent of gross domestic product. Some analysts says that this will only be possible by cutting expenditure by around 40 billion euros.

* The PP is likely to implement further public sector wage cuts.

* The budgets of Spain's 17 autonomous regions are also expected to see swingeing cuts, although the PP has committed to keeping the welfare system intact. The regions control the health and education budgets.

* The PP has said it will reintroduce a tax rebate for the purchase of new homes which was abolished by the Socialists at the end of 2010.

* The PP has said it will support entrepreneurs, small and mid-sized companies and the self-employed with tax cuts. They also plan changes to the Value Added Tax (VAT) system so these businesses will not have to pay VAT until their bills are paid.

* One-person enterprises hiring an employee will be granted a 3,000 euro tax rebate.

SOCIAL REFORMS

* Regarding a 2010 law legalizing abortion, PP leader Mariano Rajoy has said he plans to eliminate the possibility for 16 or 17-year olds to have an abortion without parental consent.

* The PP has challenged in the Constitutional Court a 2005 law allowing gay marriage. Rajoy has said he supports civil unions for homosexual couples but does not think they should be called marriages.

* The PP's manifesto says the Dependency Law, which established a benefit for people who care for a disabled or elderly relative, has failed to meet expectations, saying it it is too expensive. (Compiled by Judy MacInnes; and Emma Pinedo; Editing by Angus MacSwan)

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