Tensions between the Bank of Spain and the Government are increasing at times, which is seriously threatening the relationship between these two institutions. Jose Luis Escriva the Minister of Social Security, had harshly criticised the supervisor’s position on pension reform. Yolanda Diaz the second vice president of the Executive has taken aim at the body for the labor market and focused their criticisms on Pablo Hernandez de Cos, the governor.
During her Thursday appearance before the Labor Commission in Congress, the Minister of Labor stated that she was concerned by statements that showed a profound ignorance about quality hiring and employment in the country.
The bullets didn’t stop there. “I will be honest and I’m sorry to have this to say, but I am shocked that the governor doesn’t know how to distinguish between contracting and employment. She insists that this is a serious matter.
The minister also referred to statements Nunez Feijoo made hours earlier assuring that unemployment data was “made up” since discontinuous landlines don’t compute. Diaz replied by pointing out that the “distant fixed” are not unemployed and that this type of contract has been in place for 25 years. She added that they are quality contracts that can be quoted and provide a guarantee for rights. Feijoo’s words do not indicate that he is ready to govern.
Diaz’s harsh tone was even more evident in his references about the Bank of Spain. Even more so after Diaz presented Wednesday’s Annual Report to Congress, he stated that it was still too early to evaluate the effect of labor reform on employment. He warned that the reduction in temporary work could be caused by both the replacement of temporary jobs for permanent ones and the destruction of temporary jobs. This was in reference to the fact that similar reforms were carried out in other countries.
Diaz even implied that the Bank of Spain bases its decisions on political biases in his speech. The minister said, “I am concerned about this institution not speaking with the data”, recalling that “92%” of new jobs are created in private firms. It is grave that this institution doesn’t know this data. She remarked, “Therefore, affirming having the negative differential of public work with respect to EU, what he affirmed leaves me perplexed, and seems wrong to me”.
The Bank of Spain’s position regarding separating pensions and the CPI was also criticized by the Minister of Labor. She said, “Imagine how the pensioners in our country would feel if inflation was not maintained.”
Now, back to the charge against the governor. After the Bank of Spain’s recommendation to include civil servants and pensioners in the income agreement, “I am concerned by the lack of information about who the pensioners in our country are”. It worries me because he doesn’t seem to know that the majority of pensions don’t reach an income of 1,000 euro per month.
They also criticize the income agreement that the supervisor had been calling for for months. This highlights the fact that inflation is not caused by wages, as the Bank of Spain has started to acknowledge. Beware of rental agreements. He assures them that the history of this country is not favorable to them.
