News

LABOR MARKET REFORM (FEBRUARY 2012)

1.- Dismissal cost reduction to address labor market duatliy

Unfair dismissal : compensation of 33 days per year worked (up to 24 months). Down from 45 days and 42 months.

Encourage the use of fair dismissal : compensation of 20 days per year worked (up to 12 months). New regulation:

Effect: fair dismissal to be the main channel to end the contract as oppose to now.

Reform collective and objective redundancies to reduce legal uncertainty and high cost

Effect: increase agility and the use of collective fair dismissal (compensation of 20 days per year worked)

Monitor the development of the capital fund for dismissal (Austrian fund)

2.- Job intermediation and training

Temporary Employment Agencies are now authorised to act as private placement

Improve professional training.

New training contract (youth 16-30 years)

Modify the current permanent part-time contract to allow overtime and increase its flexibility.

Regulation of teleworking to promote its implementation.

3.- Internal Flexibility and collective bargaining

Facilitate contract modifications.

Remove administrative authorisation to suspend the contract

Collective bargaining reforms

4.-Encouraging permanent contracts

Creating a new permanent contract

New bonuses

Reintroduce the prohibition of linking different temporary contracts further than 24 months.

FINANCIAL REFORM (FEBRUARY 2012)

1.- Restructuring of real estate assets

New provisions and capital requirements:50 billion euros

Troubles assests

Non-troubles assest

The deadline is December 31st 2012.

After the reform the specific provisions plus capital buffers will raise the coverage of land, ongoing developments, finished properties and housing.

2.- Mergers framework

The financial reform encourages merges and consolidtions

Adavantges:

Deadlines: banks that merge will be allowed an additional year for the cleanup The required cleanup could be done at the expenses of total assests

Conditionality

3.- Fund for Orderly Bank Restructuring (FROB)

4.- Remuneration of entities with public financial support will be reduce by 70%

5.- Simplification of the saving banks organizative structure