Stepping in the area

Fernando Fernández. Professor. IE Business School

7 July 2011

Alfredo Pérez Rubalcaba is at risk of becoming the Kaká of Spanish politics, seeing how he is rendered transferable before he even makes his debut.

The collective bargaining reform has become the first test of Spain’s candidate for president. The government seems bound to legislate and the content of the decree will not be harmless. Especially after the Bank of Spain has certified the death of the labour reform which not only failed to create employment, but also did nothing to increase the number of open-ended contracts. The local elections changed many things, including the attitude of employers. Although, in all honesty, their president had already been called to order by a Board that considered he had already relinquished too much. Employers think (and they are right) that never before have there been such favourable objective conditions for an in-depth reform of a labour relations framework considered unanimously as secondarily responsible for destroying employment, the prime culprit obviously being the burst of the construction bubble. Indeed, all you have to do is look at the labour reform applied in Portugal to see the way things are heading. International pressure is tremendous. National indignation with the employment situation is massive. And the election results are crystal clear.

Blaming employers for taking advantage of the situation is tantamount to understanding nothing about political economics, about the theory of bargaining strategies and games. What have the trade unions done with the right to veto awarded to them by President Zapatero during his first seven years in power? Another reason it is pointless is that the problem is not the process, but rather the result, as the Socialist Party has had to admit by renouncing primary elections to avoid bigger problems, as Chacón could tell you. The core of the question is not whether or not there is an agreement, but rather whether or not the agreement will be reasonable, whether or not it will create employment, increase the potential growth of the Spanish economy and meet our creditors´ demands.

Let´s get back to Rubalcaba. As a candidate, he is trying to increase his voters and recover those lost with the swing to the right brought about by the economic situation. As vice-president, he wants to satisfy our creditors and avoid an economic disaster. Creditors who, by the way, are particularly sceptical after seeing the electoral impact on the public accounts of the autonomous communities even before the new governments have been installed and performed their corresponding audits.

He might leave government to avoid having to assume that contradiction, but it is too late to ignore ZP´s legacy and Borrell´s shadow would not let him sleep. He could have himself appointed as secretary general, but then the term of office would have finished. He will have to assume his new responsibility. In short, we are witnessing the first challenge facing the capacity for imagination of the alleged star signing for the new season. It will be interesting to see him asking demonstrators in Puerta del Sol to be realistic, to abandon utopia and accept lower salaries to increase their possibilities of finding employment. It will be interesting to see him asking the trade unions to abandon their self-management dreams and do what the Germans do and lower salaries, increase working hours and give employers the capacity for internal staff adjustments through functional, hourly and work-centre mobility. Ultimately, sociologists insist on the force of public narrative to influence election behaviour. Let´s see what this great storyteller comes up with because he is at risk of ending up like Kaká, another classic who was transferable before his debut, if the illustrious Real Madrid player will permit my comparison.

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