Spain's CEOE demands cheaper dismissals and welfare cuts

CEOE demands welfare adjustments and cheaper dismissals

At what age do you plan to retire, and how much would it cost your company to fire you? The CEOE has answered both questions for you. Its proposal for the next government includes adjustments to the welfare state—described by the employers themselves as "oversized"—cheaper dismissals, and unemployment benefits that are lost if a job offer is rejected. The proposal arrives during the peak of the July 23 election campaign and is signed by José Luis Feito, a member of the CEOE Executive Committee and Board of Directors.

And there is a detail that does not go unnoticed: those demanding adjustments from others earn €380,000 a year for their position.

What the CEOE demands from the next government

Feito opens the catalog with dismissals. He argues that effective Spanish costs are "the highest in the world", attributing this to the fact that most dismissals end up being declared unfair, which makes exits more expensive and, in his logic, discourages hiring. It is, he says, "a problem that needs fixing." In practice: lower severance pay and less friction when firing.

The second pillar is the subsidy. The proposal is to make it conditional: if an unemployed person is offered a job, "they must accept it, or the benefit disappears". On paper, it sounds like fraud control; in practice, debating what job is considered acceptable is the crux of the matter.

Adding to this is Antonio Garamendi, president of the CEOE, who accepts the current labor reform but asks for "tweaks" if the July 23 election leaves Feijóo in La Moncloa (the Spanish Prime Minister's residence). And he denounces a "harassment and takedown campaign" against businessmen "with names and surnames."

How much does the CEOE president earn?

Another figure appearing in the cross-reference of documents: Garamendi's salary amounts to €380,000 annually, approved unanimously by the 300 associations that make up the organization. It is also the first time since 2007 that a CEOE president is paid for the role.

The coincidence needs no adjectives: while the employers ask everyone else to tighten their belts on social spending, their leadership certifies that the chair is not free. It is not illegal, it is a fact. But the headline speaks for itself.

Where should the adjustment begin?

Here begins the distribution of the bill. Part of the analysis holds that before touching pensions, other items should be slimmed down: public salaries, administrative duplications, and the cost of the regional system. That alone would suffice for almost everything, it is assured, although those defending it admit that no politician is willing to dismantle the clientelist system that sustains them.

Opposing this are those who point to the public sector as the first cut, without further nuances, and those who prefer freezing pensions rather than lowering them. Also appears the other side of the balance sheet: if adjustments are needed, let corporate profits, dividends, and executive salaries start paying. That line item, curiously, never appears in the employers' proposals.

From 65 to 95 in the same conversation

A calculation circulating that nobody fully refutes: previously there were six contributors per retiree; now there are fewer than two. With that arithmetic, sustaining the system as we know it requires either more income, more years worked, or lower pensions. There is no fourth option.

The most repeated approaches defend the cap at 65 years old—in practice, many people retire or pre-retire earlier, and in some professions, one is already exhausted by 60—and point out the risk of crossing legal retirement age with life expectancy: if one retires later than they live, contributing becomes a payment without return. Another less friendly reading points to the fine print: maintaining ordinary retirement beyond 65 and opening a window between 60 and 65 with penalties, which in practice leaves those who leave early receiving less. The reduction is not announced: it is chosen.

July 23 and the suspicion that the recipe is the same

The question hovering over the issue is not what the CEOE wants, but who will apply it. Some joke that the employers campaign for the PSOE every time they speak, and others maintain, beyond the joke, that both blocks end up executing the same economic policy, with the PP acting as the executor of what the other does not sign during election time. If to this is added that a sympathetic government will apply "logical measures," the result is an uncomfortable suspicion: regardless of the tonalidad of the Executive, someone will have to pay the bill.

With €380,000 at the top, the most expensive dismissals in the world in the workforce, and an election campaign underway, the CEOE has already decided which part of the system is superfluous. All that remains is for the electorate to decide whether to listen, abstain, or simply row.