Spain’s local and regional governments will not only have to cut salaries for public employees, it will also have to reduce the workforce considerably, as the public sector needs to be scaled down "forcefully," according to Elvira Rodríguez, president of the parliamentary commission on economy and deputy for the governing centre-right Popular party. 

The local governments in Spain’s 17 autonomous regions and over 8,000 municipalities bear much responsibility for the imbalances in the public accounts and they must undertake major budget cuts in order to reduce Spain’s high budget deficit – 8.9 percent in 2011 – and to get the country’s economy in order.

According to the national census, the public sector employs over 3.1 million people, out of which 2.1 million are so-called funcionarios, civil servants in local, regional and central governments who have entered their positions only after having passed competitive exams. They are guaranteed life-time employments, which means they will not be affected by the dismissals.

The remaining 30 percent of the public employees, a total of about 1 million people, risk being dismissed at any time. The government spends €123bn every year on these positions.

Worst for employees in municipalities

The situation is most difficult for those who are employed by the municipalities. According to government statistics, one in five among public employees work for the 8,116 local administrations in Spain’s cities and villages, a total of almost 647,000 people.

Among them, about 60 percent don’t have a contract that protects them from so-called ‘ERE’s, a collective termination of employment for a group of employees, allowed when the employer is under economic restrains.

Budget Minister Cristóbal Montoro has mentioned the possibility of layoffs in the public sector for months.

“The public administrations are not employment offices,” he said. “The public employees must earn their position, just like any other Spaniard.”

'Safer' in central government and regions

Among those working for the central government, 80 percent can remain calm. Out of about 593,000 employees, only about 124,000 have temporary contracts that can be terminated.

The number of ‘safe’ employments are even higher in the autonomous regions, where only 150,000 out of 913,000 public employees are on temporary contracts that can be terminated.

The jobs in the public sector that should disappear are those that are not for ‘career civil servants,’ or funcionarios, according to Antonio Beteta, State Secretary at the Ministry for the Treasury. 

“[These are] public jobs that are normally peripheric” he said referring to a large number of public positions that were established during the economic boom. “Their employees are not funcionarios but they are still public employees, but there is nothing else that can be done.”

Six hundred new companies in three years

Until now, when PP deputy Rodríguez said a public sector that has grown by 440,000 employees during the last 10 years is unsustainable, the recession seems to have been ignored by the public employer.

In fact, between 2007 and 2010, the autonomous regions created 600 new companies run by the region, generating “important growth” for the public sector and adding up to a total of 2,292 entities dependant on the regional governments by mid-year in 2011, whose employees are paid from the public accounts.

The government’s plan to reduce spending in the public sector is still being elaborated and the details are not known yet. The plan is expected to be approved by the end of July.