(Bloomberg) --
Spain's governing coalition descended into a war of words on Thursday after Prime Minister Pedro Sanchez courted a small, nationalist party to secure support for a two-week extension to a state of emergency.
The rift started Wednesday evening, after parliament approved Sanchez's request. Following the vote, EH Bildu, a left-leaning, pro-independence Basque nationalist group, said it had agreed to abstain from the vote in exchange for a commitment from Sanchez's Socialist party to scrap labor reforms.
By midnight, the Socialist party had contradicted Bildu's statement, saying the agreement was simply to review the regulation. The law, which loosened labor market rules, making it easier to hire and fire workers, was passed in 2012 during the economic crisis.
Tensions increased Thursday morning when Deputy Prime Minister Pablo Iglesias, head of Unidas Podemos, the coalition government's junior partner, said in an interview that the agreement with Bildu was to reverse the law. Jose Luis Abalos, the transport minister and one of the Socalists's leading political operatives, contradicted him in a separate interview, saying the deal was simply to review the law.
Late on Thursday, another Deputy Prime Minister, Nadia Calvino, said that reversing the labor law would be “absurd” and would create legal uncertainty. Calvino also serves as economy minister.
This is not the first time that the labor law has sparked tensions between the Socialists and Podemos. The issue had already been raised when the two parties where negotiating the formation of a government at the start of the year, with Podemos demanding it be scrapped.
Sanchez has already seen his support slowly dwindle over the management of the national lockdown. The disagreement also threatens to alienate other possible partners, most notably the liberals of Ciudadanos and the PNV, a centrist Basque nationalist group, which are both highly critical of Bildu.
To gain support for the proposed extension of the emergency, the Socialists had negotiated the support of Ciudadanos and the PNV. In both cases the agreements were made public before the vote, unlike what happened with Bildu.
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