Madrid SpainThe Spanish government has estimated that new labour reforms will be able to generate 2.37 million permanent jobs in the country by the end of next year. In the financial report coming along with the decree-law, it has been estimated that 895,723 permanent contracts could be signed by the end of this year, with a further 1,474,497 in 2011.

Some key measures are estimated to cost the government nearly 700 million euro until the end of 2012. This mainly comprises of the Wage Guarantee Fund of eight days compensation, if and when the permanent contract is dismissed. The estimated cost for this is expected to be 123.6 million euro.

According to the financial report, 212.88 million euro would be the cost for subsidies to hire jobless people aged over 45 and 53.58 million euro is estimated to be the cost for converting training, replacement or substitution of permanent contracts over a period of three years.

A further 80.54 million euro is estimated to be spent on exemption from contributions to social security in training contracts.

However, analysts are of contrasting views when it comes to the government’s estimations. There are economists, businessmen, unionists and lawyers who believe that the reform will not help in creating short term employment.