Spain's parliament gave final approval Thursday for a sweeping overhaul of the labour market designed to slash soaring unemployment and revive the economy, despite union plans for a general strike. The new law - which will make it easier and cheaper for employers to fire workers - was slammed by unions as backward step immediately after its approval by the lower house of parliament.
The International Monetary Fund has said the labour market reforms are "absolutely crucial" if Spain is to cut its jobless rate and rein in the deficit. Spain's unemployment rate has soared to more than 20 percent, the highest in the 16-nation eurozone, following the collapse of the building sector at the end of 2008.
The rise in joblessness has jacked up government spending on unemployment benefits, pushing Spain's public deficit to 11.2 percent of gross domestic product last year, the third-highest in the eurozone after Greece and Ireland. The Socialist government of Prime Minister Jose Luis Rodriguez Zapatero passed a 15-billion-euro (19-billion-dollar) austerity plan in May aimed at shoring up Spain's public finances amid investor concerns it could follow Greece into a financial crisis.
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