Spanish unions agree wage moderation

Spain's two main union confederations, the CCOO and the UGT, reached agreement with the principal employers' groupings last month on pay increases in 2002.

Although the document does not precisely commit either side to a specific pay increase it says that "pay negotiations should take as their first point of reference the forecast inflation, as set by the government for the year 2002". Increases above inflation are possible but "within the limits derived from increases in productivity".

The government forecasts that inflation next year will be 2.0% so increases are likely to be modest. The employers have, however, agreed that agreements should include a guarantee that lost ground will be made up if inflation is greater than expected. In 2001 the government forecast that inflation would be 2.0% by December 2001. In fact it was 2.7%.

The agreement also sets a number of other aims, including maintaining employment, encouraging stability in employment, improving qualifications and promoting equal treatment.

Overall the agreement, which was negotiated after the government threatened to intervene directly in the framework of collective bargaining, is clearly intended to produce what it describes as a "moderate growth in salaries" as the best approach to "economic uncertainties and the first symptoms of a down-turn".