Spanish employers do political spadework -- for '83

In an attempt to move the centrist government of Premier calvo Sotelo to adopt more right-wing political and economic policies, the Spanish Confederation of Employers has opened fire on the government well before the 1983 elections.

The ruling center party, Union Centro Democratica (UCD), may actually lose those elections to the socialists if present policies are maintained, the president of the employers' group said.

A test of strength began early this month between the confederation and the government when the government officially presented its 1982 draft budget. The employers' confederation (CEOE, for short) unexpectedly announced its decision agreements reached last June among the Spanish government, employers, and unions to restrain wages and inflation and combat unemployment.

Ostensibly, the CEOE said it was protesting what it called an inflationary budget, in which government spending will be increased 26 percent, to 3.5 trillion pesetas ($36.8 billion). The projected budget deficit, equivalent to 3 .5 percent of the GNP, was also condsidered unacceptable by the employers.

The employers, however, chose a relatively minor issue involving the designation of $8 million from the national budget for sociocultural activities of the Spanish unions as the main pretext for backing out of the national employment agreements. This government subsidy had been agreed upon in June as a partial advance on the capital-assets "ineritance" from the old fascist unions under the Franco dictatorship, which included both management and workers in the same organization. The employers want equal allocation for their associations and activities.

The real motive, however, seems to be the CEOE's disagreement with government economic policy. The attacks by the employers seemed to be aimed directly at the minister of the economy, Juan Antonio garcia Diez, considered to be an "infiltrated social democrat" by more conservative sections of the CEOE.

"We want them [the UCD] to fulfill their electoral economic program," a CEOE source stated. "Premier Calvo Sotelo had promised to present an anti-inflationary budget, but the present draft includes a greater deficit than that of 1981," another CEOE spokesman insisted.

The employers' association is convinced that the deficit projected for next year -- almost 700 billion pesetas ($7.4 billion) -- will make any inflaton restraint difficult, if not impossible. The natonal employment agreement had been based on restraining inflation and holding wage increases to between 9 and 11 percent, about two points below the projected inflation rate. If inflation is not maintained at these levels, a real possibility with the new draft budget, according to the CEOE, then the unions will most likely demand wage increases above the agreed levels.

Government economic sources were both puzzled and disturbed at the employers' angry accusations and the threat to back out of the employment agreements. Economics Ministry spokesmen, in a show of force, have reaffirmed their decision to stand by the employment agreements with or without the employers and expressed hope that the CEOE will reconsider its stand. Both the communist and socialist unions have affirmed their support for the employment agreement regardless of the CEOE withdrawal, which they classify as "blackmail, undue pressure, and an attempt to destabilize the unions."

The CEOE itself has becme polarized into hawks and doves for the coming battle between the employers and the UCD. One CEOE source, representing the "dove" faction, said that if the government did move to the right, "they will lose the next elections."

Other circles in the private sector and finance ridcule the fierce CEOE attacks as exaggerated, athough they agree that the new budget shows a lack of a clear desire to reduce the public deficit. Most financial and banking institutions remain skeptical over fulfilling the optimistic 3 percent growth estimate of the GNP in 1982.

The administration, however, is convinced that economic indicators of the last few months and the expected increase in exports will ensure a growth of at least 2 percent. Also, strong government investment for 1982 and the recovery of private investment due to more credit possibilities, plus the national employment agreements, are expected to help fulfill the 3 percent estimate. Nevertheless, last year the government projected growth for 1981 at 2.5 percent. Now most experts, including those in the Economics Ministry, estimate that GNP will come in a 1 percent or less.

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