US embassy cable - 04MADRID789

UNCLAS SECTION 01 OF 02 MADRID 000789 
 
SIPDIS 
 
SENSITIVE 
 
E.O. 12958: N/A 
TAGS: ELAB, PGOV, SP, Spanish Election March 2004 
SUBJECT: SPANISH ELECTIONS: LABOR PERSPECTIVE 
 
Sensitive but Unclassified.  Please protect accordingly. 
 
Summary 
 
1.  (SBU) With the economy doing well, unemployment is 
nonetheless a prominent issue in the campaign for the March 
14 general elections, and remains one of the principal 
concerns of Spaniards.   The Popular Party, having halved 
Spain's unemployment rate from over 22% to 11.2% in eight 
years, is portraying itself as the party of proven job 
creation.   The Socialist opposition and the unions, 
particularly the UGT, are focusing instead on the precarious 
nature of some of the new jobs.   They emphasize that 31% of 
the jobs in Spain are on temporary contract, more than double 
the EU average.   The other major national union 
confederation, CCOO, has been more muted than the UGT in its 
criticism of the PP.   PP candidate Rajoy promises two 
million new jobs by 2008 and full employment, with a 6% 
unemployment rate, by 2010.   While the unions do not 
formally endorse candidates, the UGT has publicly allied 
itself with the Socialists.   End Summary. 
 
UGT Views 
 
2.   (U) On February 5, leaders of the General Worker's Union 
(UGT-traditionally allied with the Socialists), one of 
Spain's two large union confederations, held a conference to 
spell out the union's agenda before the March 14 general 
elections.  The leader of the Left Union (IU/Communist) 
party, Gaspar Llamazares, and Socialist Party (PSOE) National 
Coordinator Jose Blanco attended.   The PP was reportedly 
invited but did not attend. 
 
3.  (U) UGT Secretary General Candido Mendez argued that in 
the eight years of the Aznar government, the PP had 
"squandered" Spain's economic growth and neglected social 
spending.   Mendez drew particular attention to the fact that 
31% of Spanish workers are on temporary contract, a figure at 
least two times above the EU average.   Mendez said many of 
the jobs created during the PP mandate were "precarious" and 
lacking in benefits.   Workers in such contracted jobs are 
under-trained, over-worked, and prone to work-related 
accidents, Mendez said.  Mendez said this precarious 
employment exploits workers and ultimately lowers Spain's 
competitiveness.    Mendez also criticized the Aznar 
government for under-investing in research and development in 
new technologies.   Mendez argued that much of the job growth 
in the PP years was due to growth in Europe and worldwide, 
rather than to PP policies. 
 
CCOO Views 
 
4.  (SBU) Comisiones Obreras (CCOO ) originally allied with 
the Communist party but now independent and center-left) 
union officials share UGT's concerns on the need to shift 
more workers from temporary to permanent contracts. 
However, CCOO representatives noted to us that it was the 
Socialist government of Felipe Gonzalez, rather than the PP, 
that had set up the rules governing temporary workers in the 
first place.   It is, they say, therefore disingenuous for 
the Socialists to criticize a system that they set up.   CCOO 
reps were more impartial in their party preferences and told 
us that CCOO can work with the PP as well as PSOE.   If the 
PP wins, CCOO would prefer that it not be by absolute 
majority.   They believe that the PP was more flexible and 
open to dialogue in the first Aznar term, when was forced to 
compromise to hold its coalition together. 
 
5.  (SBU) CCOO reps were also critical of the PSOE economic 
plan.   They regard Socialist candidate Zapatero's proposed 
tax policy as regressive, especially considering he is from 
the left.   They also do not see the budget numbers adding 
up.   Zapatero has pledged to keep close to a balanced 
budget, but CCOO sees PSOE pledges for greater spending 
combined with tax cuts adding up to budgetary problems. 
 
PP Platform: Proven Job Creation 
 
6.  (U)  Labor was a key issue in the electoral program the 
PP unveiled at their February 14-15 National Convention.  PP 
candidate Mariano Rajoy promised 2 million new jobs by 2008 
and a drop in the unemployment rate to 8% (from 11.2% at 
present).   The platform also called for reaching full 
employment, which the PP sees as a 6% unemployment rate, by 
2010. 
 
Socialist and Left Union Views 
 
7.  (U) On the campaign trail, Zapatero has repeatedly 
stressed the need to transform the precarious temporary jobs 
into "dignified" jobs.   The Left Union (IU)'s Llamazares has 
made this a frequent refrain as well.   Zapatero's proposal 
to achieve this is to offer incentives to employers who offer 
full-time contracts. 
 
Comment 
 
8.  (SBU) The election campaign is occurring in the absence 
of any generalized labor strife.   (There have been isolated, 
and at times violent, protests by redundant ship workers from 
the Izar firm, but these are not election-related and not 
typical of the overall labor situation.)    While UGT support 
for the Socialists is clear, UGT is not convoking workers out 
to the streets to protest against the PP.   After the general 
strike of June 2002, the Aznar government backed off on labor 
reforms and avoided antagonizing the unions.   As a result, 
while unemployment remains a key issue, the role of the 
unions in the campaign has been, for the most part, marginal. 
 
ARGYROS