Spain's social partners sign V AENC wage deal recommending 4%, 3% and 3% rises

On 10 May 2023, Spain's two main employers' organisations, CEOE and Cepyme, and the two largest trade unions, CCOO and UGT, signed the V Agreement for Employment and Collective Bargaining (AENC). The deal followed months of talks and an earlier breakdown in negotiations, as inflation eroded household incomes after the 2022 energy price surge.

The AENC is not legally binding. It sets out guidelines for the sector and company-level collective agreements that determine pay for most Spanish employees. The V AENC recommended wage rises of 4% in 2023, 3% in 2024 and 3% in 2025, and it also included a wage-review mechanism meant to help pay keep pace if prices rose faster than expected.

The agreement mattered because Spanish inflation had been running well above these levels in 2022 and early 2023, so many workers had lost purchasing power. The government, led by Pedro Sánchez, welcomed the pact as a way to share the cost of inflation between companies and workers. Its recommendations have since served as the benchmark against which actual pay settlements are measured.