A rift has erupted today in Spain’s coalition government over the implementation of a reform plan to reduce weekly working hourswith the Minister of Labor accusing the Minister of Economy of “aligning with the employers”.

The Minister of Labor Yolanda Diathhead of the leftist party Sumartold state radio station RNE that they exist “blatant disagreements” with the Prime Minister’s Socialist Party Pedro Sanchez for the reform and she invited the government ministers to “respect the panel of experts” who drafted the reform.

Diath set her sights on the Minister of Economy, Carlos Cuerpo, who suggested the delay in the implementation of the reform by one year to give small businesses time to adapt.

Cuerpo “he has to decide which side he is on, that of the workers of this country who are asking to live a little better, or that of the employers”said the Minister of Labor.

A finance ministry source said the government remains committed to the reform plan and that its implementation is “priority”.

“We must continue to rely on a functional economic policy, which guarantees the sustainability of our economic and social achievements”the source added.

Spain recorded one last year of Europe’s best economic performers, with growth significantly influenced by a surge in tourism, immigration and a strengthening labor market.

Diath, who is also deputy prime minister, has been tasked with the reform, which is key for her party to support Sanchez’s minority government.

In their joint program, sealed in October 2023, the Sumar and the Socialist Party they had committed to reducing before the end of 2025 from 40 to 37.5 hours of legal weekly work, with a first stage to 38.5 hours, without loss of pay.

Spain’s central bank and a former finance minister have warned that higher labor costs may increase inflation and limit job creation.

Businesses have also expressed concerns about the reform.

Towards the end of December, after many months of negotiations, the government signed an agreement with the two largest trade unions, the CCOO and the UGT, for this reform, but without the agreement of the employers and running the risk Parliament to reject this reform.

This reduction, the first since 1983, is expected to affect approx 12 million private sector workers – civil servants already benefit from 37.5 weekly working hours. The purpose is, according to Ms. Diath, workers can “live better, tire less”.

The employers’ side in mid-November left the negotiations after eleven months of fruitless meetings, considering that their demands were not being taken into account by the government.

Employers’ organizations are concerned about the impact of the reform on Spanish competitiveness. They appreciate that not all sectors of activity are affected in the same way and how a general reduction in working hours can weaken some businesses.

Fears dismissed in December by Diath, who recalled that the Spanish economy is the most dynamic among OECD countries, with growth expected to reach 3.1% in 2024 according to Spain’s central bank, and he promised that the reform would be completed.

The agreement will need to be approved by MPs to come into effect. But it faces reservations from many of the government’s allies in Parliament, including the nationalist Basque party PNV and its Catalan separatists Junts per Catalunya (JxCat).