Cable Viewer

Currently released so far... 4489 / 251,287

### Articles

Brazil Sri Lanka United Kingdom Sweden Editorial United States Latin America Egypt Yemen Jordan

### Browse latest releases

2010/11 2010/12 2011/01 2011/02
2010/11/28 2010/11/29 2010/11/30
2010/12/01 2010/12/02 2010/12/03 2010/12/04 2010/12/05 2010/12/06 2010/12/07 2010/12/08 2010/12/09 2010/12/10 2010/12/11 2010/12/12 2010/12/13 2010/12/14 2010/12/15 2010/12/16 2010/12/17 2010/12/18 2010/12/19 2010/12/20 2010/12/21 2010/12/22 2010/12/23 2010/12/24 2010/12/25 2010/12/26 2010/12/27 2010/12/28 2010/12/29 2010/12/30
2011/01/01 2011/01/02 2011/01/04 2011/01/05 2011/01/07 2011/01/09 2011/01/10 2011/01/11 2011/01/12 2011/01/13 2011/01/14 2011/01/15 2011/01/16 2011/01/17 2011/01/18 2011/01/19 2011/01/20 2011/01/21 2011/01/22 2011/01/23 2011/01/24 2011/01/25 2011/01/26 2011/01/27 2011/01/28 2011/01/29 2011/01/30 2011/01/31
2011/02/01 2011/02/02 2011/02/03 2011/02/04 2011/02/05 2011/02/06 2011/02/07 2011/02/08 2011/02/09 2011/02/10 2011/02/11 2011/02/12 2011/02/13 2011/02/14 2011/02/15 2011/02/16 2011/02/17

### Browse by creation date

66 72 73 75 79 86 88 89 90 00 01 02 03 04 05 06 07 08 09 10
1966/12
1972/02 1972/08
1973/04
1975/03
1979/08
1986/05
1988/01
1989/12
1990/01 1990/07 1990/08
2000/06 2000/09 2000/11
2001/02 2001/03 2001/07 2001/10
2002/02 2002/03 2002/11
2003/03 2003/04 2003/05 2003/06 2003/07 2003/08 2003/09 2003/10 2003/11 2003/12
2004/01 2004/02 2004/03 2004/04 2004/05 2004/06 2004/07 2004/08 2004/09 2004/10 2004/11 2004/12
2005/01 2005/02 2005/03 2005/04 2005/05 2005/06 2005/07 2005/08 2005/09 2005/10 2005/11 2005/12
2006/01 2006/02 2006/03 2006/04 2006/05 2006/06 2006/07 2006/08 2006/09 2006/10 2006/11 2006/12
2007/01 2007/02 2007/03 2007/04 2007/05 2007/06 2007/07 2007/08 2007/09 2007/10 2007/11 2007/12
2008/01 2008/02 2008/03 2008/04 2008/05 2008/06 2008/07 2008/08 2008/09 2008/10 2008/11 2008/12
2009/01 2009/02 2009/03 2009/04 2009/05 2009/06 2009/07 2009/08 2009/09 2009/10 2009/11 2009/12
2010/01 2010/02

### Browse by origin

A B C D F G H I J K L M N O P Q R S T U V W Y Z
Embassy Athens Embassy Asuncion Embassy Astana Embassy Asmara Embassy Ashgabat Embassy Ankara Embassy Amman Embassy Algiers Embassy Addis Ababa Embassy Accra Embassy Abuja Embassy Abu Dhabi Embassy Abidjan Consulate Amsterdam American Institute Taiwan, Taipei
Embassy Bujumbura Embassy Buenos Aires Embassy Budapest Embassy Bucharest Embassy Brussels Embassy Bridgetown Embassy Bratislava Embassy Brasilia Embassy Bogota Embassy Bishkek Embassy Bern Embassy Berlin Embassy Belgrade Embassy Beirut Embassy Beijing Embassy Banjul Embassy Bangkok Embassy Bandar Seri Begawan Embassy Bamako Embassy Baku Embassy Baghdad Consulate Barcelona
Embassy Copenhagen Embassy Conakry Embassy Colombo Embassy Chisinau Embassy Caracas Embassy Canberra Embassy Cairo Consulate Curacao Consulate Casablanca Consulate Cape Town
Embassy Dushanbe Embassy Dublin Embassy Doha Embassy Djibouti Embassy Dhaka Embassy Dar Es Salaam Embassy Damascus Embassy Dakar Consulate Dubai
Embassy Freetown
Embassy Guatemala Embassy Gaborone
Embassy Harare Embassy Hanoi Consulate Hamburg
Iran RPO Dubai Embassy Islamabad Consulate Istanbul
Embassy Jakarta Consulate Jerusalem Consulate Jeddah
Embassy Kyiv Embassy Kuwait Embassy Kuala Lumpur Embassy Kinshasa Embassy Kigali Embassy Khartoum Embassy Kampala Embassy Kabul
Embassy Luxembourg Embassy Luanda Embassy London Embassy Lisbon Embassy Lima Embassy Lilongwe Embassy La Paz Consulate Lagos
Mission USNATO Embassy Muscat Embassy Moscow Embassy Montevideo Embassy Monrovia Embassy Minsk Embassy Mexico Embassy Maputo Embassy Manama Embassy Managua Embassy Malabo Embassy Madrid Consulate Munich Consulate Montreal Consulate Monterrey
Embassy New Delhi Embassy Nassau Embassy Nairobi Consulate Naples
Embassy Ouagadougou Embassy Ottawa Embassy Oslo
Embassy Pristina Embassy Pretoria Embassy Prague Embassy Port Au Prince Embassy Phnom Penh Embassy Paris Embassy Paramaribo Embassy Panama Consulate Peshawar
Embassy Quito
REO Basrah Embassy Rome Embassy Riyadh Embassy Riga Embassy Reykjavik Embassy Rangoon Embassy Rabat Consulate Rio De Janeiro Consulate Recife
Secretary of State Embassy Stockholm Embassy Sofia Embassy Skopje Embassy Singapore Embassy Seoul Embassy Sarajevo Embassy Santo Domingo Embassy Santiago Embassy Sanaa Embassy San Salvador Embassy San Jose Consulate Strasbourg Consulate Shenyang Consulate Shanghai Consulate Sao Paulo
Embassy Tunis Embassy Tripoli Embassy Tokyo Embassy The Hague Embassy Tel Aviv Embassy Tehran Embassy Tegucigalpa Embassy Tbilisi Embassy Tashkent Embassy Tallinn
USUN New York USEU Brussels US Mission Geneva US Interests Section Havana US Delegation, Secretary UNVIE Embassy Ulaanbaatar
Embassy Vilnius Embassy Vienna Embassy Vatican Consulate Vladivostok
Embassy Windhoek Embassy Wellington Embassy Warsaw
Embassy Yerevan Embassy Yaounde
Embassy Zagreb

### Browse by tag

A B C D E F G H I J K L M N O P Q R S T U V W X Y Z
ASEC AF AR AJ AE AEMR AMGT APER AG AM AS AU AORC AGMT AFIN ABUD ATRN ACOA AO AX AMED ADCO AODE AFFAIRS AC AL ASIG ABLD AA AFU ASUP AROC ATFN AVERY APCS AER ASECKFRDCVISKIRFPHUMSMIGEG AEC
BO BR BU BM BEXP BRUSSELS BL BK BA BILAT BTIO BH BE BX BIDEN BY BG BF BB BC BBSR BMGT
CH CA CY CVIS CMGT CASC CU CJAN CO CE COUNTER CBW CG CLINTON CI CDG CIA CACM CDB CS CD CV CF CN CAN CIS CM CONDOLEEZZA COE CR CTM COUNTRY CLEARANCE CPAS CWC CT CKGR CB CACS COM CJUS CARSON COUNTERTERRORISM
DJ DA DEAX DR DHS DOE DEA DK DISENGAGEMENT DS DOD
ER ETTC ECON EU ECIN EAID EWWT EUN ENRG EPET EINV EFIN EG ELAB ETRD EAGR EIND ECPS ES EXTERNAL EMIN ECIP EINDETRD EN EZ ET EUC EI EAIR ELTN EREL EFIS EINT EC ECONEFIN ENVR ECA ELN EINVETC ENIV EINN ENGR EUR ESA ENERG EK ELECTIONS ECUN EINVEFIN
FR FARC FJ FINR FAO FTAA FREEDOM FI FBI FMLN
GG GM GT GZ GTMO GOI GV GH GA GE GR GTIP GCC GAZA
HO HURI HILLARY HA HU HR HUMAN HYMPSK HK HSTC
IR IZ INTERPOL IS IN IT INRB IAEA ID IO IV ICTY IQ ICAO IPR IRAJ INRA INRO IC IIP ITPHUM IWC ISRAELI IRAQI ICRC IMO IF ILC IEFIN INTELSAT IL IA IBRD IMF INR IRC ITALY ITALIAN
JAMES JA JO JOSEPH JP JOHNNIE JUS
KCRM KJUS KDEM KE KPAL KU KISL KCOR KPAO KG KTIP KICC KNNP KV KBCT KTFN KSPR KHLS KTIA KWBG KMDR KGHG KN KUNR KS KIRF KFRD KIPR KAWC KPWR KCIP KSUM KWAC KMIG KOLY KZ KAWK KSEC KIFR KDRG KDEMAF KFIN KGIC KOMC KGCC KPIN KBIO KHIV KSCA KPKO KNUC KPLS KIRC KACT KRAD KCOM KMCA KHDP KVPR KDEV KWMN KFRDCVISCMGTCASCKOCIASECPHUMSMIGEG KPRP KCFE KOCI KTDB KMRS KLIG KGIT KSTC KPAK KNEI KSEP KPOA KFLU KNUP KNNPMNUC KO KTER KHUM KRFD KBTR KDDG KWWMN KFLO KSAF KBTS KPRV KMPI KNPP KNAR KWMM KERG KFRDKIRFCVISCMGTKOCIASECPHUMSMIGEG KTBT KCRS KRVC KSTH KREL KNSD KR
LY LG LE LH LU LI LO LOG LT
MASS MOPS MTCRE MNUC MX MCAP MO MARR MPOS MAR MD MZ MY MEPP MA MR ML MIL MOPPS MTCR MAPP MU MG MASC MCC MK MTRE MP MDC MEPI MRCRE MI MT MQADHAFI MAPS MUCN MASSMNUC
NL NATO NI NZ NG NU NO NIPP NPT NE NS NAR NPG NK NSG NA NT NASA NGO NP NSF NATIONAL
OVIP OTRA OPRC OSCI OTR OVP OREP ODIP OPDC OIIP OFFICIALS OSAC OAS OEXC OFDP OSCE OPIC OECD OPCW OIE
PINT PGOV PREL PHUM PL PARM PINR PBTS PTER PHSA PSOE PU POL POLITICAL PARTIES PINS PROP PE PO PBIO PECON PM PK PREF PAK POGOV PINL PKFK PGOF PARMS PORG PA PMIL PTERE PF PALESTINIAN PY PGGV PNR POV PAO PFOR PHALANAGE PARTY PRGOV PNAT PROV PEL PINF PGOVE POLINT PRL PRAM POLITICS PEPR PSI
QA
RS RW RU RO REGION RP RIGHTS RICE ROBERT RF RFE
SU SP SNAR SCUL SR SA SY SOCI SENV STEINBERG SN SMIG SO SF SG SW SL SHUM SZ SYR ST SANC SC SAN SIPRS SK SH SI
TSPA TU TRGY TI TX TS TW TC TERRORISM TPHY TIP TBIO TH TR TT TO TFIN TD TSPL TZ TK TNGD
UP UNO UK UZ UNMIK UN US UG UNSC USEU UV UY UNGA USUN UNESCO UE UAE UNEP USTR UNHCR UNDP UNHRC USAID UNCHS UNAUS
VE VZ VT VTPREL VN VM
WI WTRO WTO WA WMO WTRQ WHO WWARD WB WBG WEU
XY XW XF XA XG XT XM XR XS XL XK XH XC XZ XD XE
YI YM YE
ZP ZR ZI ZU ZB ZF ZK ZANU ZOELLICK ZA ZO

### Browse by classification

CONFIDENTIAL CONFIDENTIAL//NOFORN SECRET SECRET//NOFORN UNCLASSIFIED UNCLASSIFIED//FOR OFFICIAL USE ONLY

### Community resources

Follow us on Twitter Check our Reddit Twitter this Digg this page Contact us on IRC

courage is contagious

### Viewing cable 09MADRID725, CONTENTIOUS LABOR REFORM TALKS TROUBLE ZAPATERO

If you are new to these pages, please read an introduction on the structure of a cable as well as how to discuss them with others. See also the FAQs
Understanding cables
Every cable message consists of three parts:

- The top box shows each cables unique reference number, when and by whom it originally was sent, and what its initial classification was.
- The middle box contains the header information that is associated with the cable. It includes information about the receiver(s) as well as a general subject.
- The bottom box presents the body of the cable. The opening can contain a more specific subject, references to other cables (browse by origin to find them) or additional comment. This is followed by the main contents of the cable: a summary, a collection of specific topics and a comment section.

To understand the justification used for the classification of each cable, please use this WikiSource article as reference.
Discussing cables
If you find meaningful or important information in a cable, please link directly to its unique reference number. Linking to a specific paragraph in the body of a cable is also possible by copying the appropriate link (to be found at theparagraph symbol). Please mark messages for social networking services like Twitter with the hash tags #cablegate and a hash containing the reference ID e.g. #09MADRID725.

Reference ID | Created | Released | Classification | Origin
--- | --- | --- | --- | ---
09MADRID725 | 2009-07-21 15:03 | 2010-12-16 12:12 | UNCLASSIFIED//FOR OFFICIAL USE ONLY | Embassy Madrid

`

    VZCZCXRO2520
    RR RUEHAG RUEHDF RUEHIK RUEHLZ RUEHROV RUEHSL RUEHSR
    DE RUEHMD #0725/01 2021504
    ZNR UUUUU ZZH
    R 211504Z JUL 09
    FM AMEMBASSY MADRID
    TO RUEHC/SECSTATE WASHDC 0966
    INFO RUCNMEM/EU MEMBER STATES COLLECTIVE
    RUEKJCS/SECDEF WASHDC
    RUEATRS/DEPT OF TREASURY WASHDC
    RUEHC/DEPT OF LABOR WASHDC

` `

    UNCLAS SECTION 01 OF 02 MADRID 000725

    SENSITIVE
    SIPDIS

    STATE FOR EUR/WE; DRL/ILCSR M.MITTELHAUSER, A.IRONS; DOL
    FOR ILAB, B.BRUMFIELD; TREASURY FOR
    OIA/OEE/T.O'KEEFFE,D.WRIGHT; OSD FOR M.SADOWSKA

    E.O. 12958: N/A
    TAGS: ECON ELAB ETRD PGOV SP
    SUBJECT: CONTENTIOUS LABOR REFORM TALKS TROUBLE ZAPATERO

    SUMMARY

    ¶1. (SBU) Businesses, economists, and international observers
    have long called for more flexibility in Spain's labor
    market. Now they are using the economic crisis and an
    exceptionally high unemployment rate--over 18% and inching
    towards 20%--to press for structural changes. President Jose
    Luis Rodriguez Zapatero insists that any reforms be approved
    via the "social dialogue" process. Ongoing tri-partite
    negotiations between government, labor, and business
    representatives have yet to produce results. Labor and
    business are at loggerheads on most issues and the government
    is largely aligned with labor. Failure to reach an accord by
    the end of July, as the GOS is aiming for, will weaken the
    credibility of Zapatero,s government. However, any agreement
    reached by the deadline is unlikely to contain significant
    reforms. END SUMMARY.

    LABOR SNAPSHOT

    ¶2. (U) Unemployment is now at over 18% and projected to reach
    20% by 2010. The OECD, IMF and other international
    organizations agree that Spain needs structural labor
    reforms. They argue that financial and administrative
    hurdles to dismissal, rigid collective bargaining structures,
    and wage indexation with inflation weaken Spain's
    competitiveness. Currently, employers must obtain government
    authorization for layoffs of 50 or more employees and provide
    45 days severance per year of service (maximum 42 months).
    Rigid hiring regulations prompted the following comment by
    Social Security Administrator Octavio Granado: "since we are
    not able to hire anyone part-time, we hire them full-time,
    knowing they will be picking their noses half the day." Also
    at issue is the bifurcation of the workforce into permanent
    and fixed-term employees. The introduction in 1997 of
    fixed-term contracts with lower dismissal costs encouraged
    job creation but also produced instability in the labor
    market. While Spain's job growth outpaced its neighbors in
    the boom period, the economic crisis has hit fixed-term
    employees--predominantly youth, women, and immigrants--the
    hardest. Spain has shed more than 20% of jobs in this
    category over the last year.

    ¶3. (U) Calls for labor reforms have proliferated in the press
    over the last several months. In April, a group of 100
    economists issued a paper recommending structural changes to
    increase flexibility in the labor market. Both the Governor
    of the Bank of Spain, Miguel Angel Fernandez Ordonez, and the
    President of the European Central Bank, Jean-Claude Trichet,
    came out in support of such reforms. Minister of Labor
    Celestino Corbacho publicly disagreed with Ordonez,s
    position, proposing increased worker protections and economic
    reforms instead. In June, a group of 700 specialists,
    supported by the two main unions--the General Workers' Union
    (UGT) and the Trade Union Confederation of Workers (CC
    OO)--issued a paper countering the group of 100,s proposals.

    SOCIAL DIALOGUE PROCESS

    ¶4. (SBU) President Jose Luis Rodriguez Zapatero has insisted
    from the start that any labor reforms be approved via the
    "social dialogue" process. Tri-partite negotiations between
    government, labor, and business representatives began in 2006
    and have intensified over the past year. With heightened
    public awareness and over ten meetings during the last two
    months, the GOS is under increasing pressure to reach an
    accord. All are agreed that Spain needs reforms to
    accelerate recovery and create sustainable economic growth.
    However, there is serious disagreement on the reforms
    required. Business, represented by the Confederation of
    Employers, Organizations (CEOE), wants changes in
    contracting and dismissal rules and improved flexibility in
    collective bargaining among other measures. They have asked
    for a 5-percentage-point reduction in social security
    contribution rates, which currently average just under 30%.
    Labor, represented by the unions, insists that Spain needs
    economic, not labor reform. They want to maintain worker
    protections and are seeking a program that would provide
    training and 420 euros a month for up to a year for
    unemployed workers whose benefits have expired.

    ¶5. (SBU) The GOS is largely aligned with labor in this
    process and asked CEOE to table its proposal for a single
    hiring contract with lower dismissal costs. Both Zapatero
    and Minister of Labor Corbacho are focused on worker

    MADRID 00000725 002 OF 002

    protections and say that now is not the time for significant
    structural reforms. As a compromise, the GOS offered to
    lower the social security contribution rates by half of one
    percentage point and to fund labor's requested training and
    benefits program for up to six months (at a total estimated
    cost of over 2 billion euros). CEOE suspended talks after
    this and a subsequent offer, which included provisions for
    autonomous community involvement in worker training programs.
    CEOE calls the government's offers insufficient and says it
    will not settle for a reduction of less than 3 percentage
    points. Labor wants the government to commit to its program
    for up to one year. They say any reductions in contribution
    rates must be temporary and reversible or it will bankrupt
    the social security system.

    PROSPECTS FOR REFORM

    ¶6. (SBU) Economist Alvaro Espina Montero, formerly a senior
    official in the Ministry of Labor, and Professor Maria
    Angeles Fernandez of the Universidad Autonoma de Madrid told
    Econoff that while labor reform is greatly needed, it is
    unlikely to occur via the social dialogue process. President
    Zapatero has been pressing for an agreement before August,
    when most Spaniards take vacation, but the measures on the
    table do not amount to structural reform. CEOE
    representative Roberto Suarez Santos told Econoff that
    give-and-take is difficult in this process because labor is
    not proposing any substantive measures. While CEOE is
    amenable to delaying implementation of more difficult
    reforms, they are unwilling to settle for small measures.
    Suarez also says the GOS is not in a position to move the
    talks forward. Zapatero has little room to maneuver with his
    insistence on accord by consensus. His weakened political
    position makes him especially beholden to his major power
    base, the unions. Furthermore, Zapatero has left himself
    open to criticism from opposition party leader Mariano Rajoy,
    who says the GOS should implement needed reforms with or
    without the support of labor.

    COMMENT

    ¶7. (SBU) This is a critical juncture for labor reform. All
    eyes are on the social dialogue process, and the GOS has
    promised results before the end of July. Zapatero is
    counting on the training and unemployment programs to assuage
    public dissatisfaction with his government. If the social
    dialogue fails to produce an agreement before the end of
    July, the GOS will lose credibility. It will also be that
    much more difficult to reach consensus this fall. Second
    quarter unemployment figures--due to be released July
    24--could make matters worse if they match projections. Both
    GOS and CEOE believe a general strike is a possibility. An
    agreement, on the other hand, is not likely to contain any
    structurally significant reforms, but it might improve the
    chances for more substantive reforms in the future. END
    COMMENT.
    CHACON

`