Spanish Labour Minister Enters Race for Top ILO Role as Agency Faces U.S. Funding Uncertainty

Spain's Labour Minister Yolanda Díaz is set to contest the leadership of the International Labour Organization (ILO), according to a statement released on Thursday. The announcement highlighted her role in advancing major labour and social reforms in Spain through social dialogue, leading to around 30 agreements.

Díaz, who established the left-wing coalition Sumar in 2023, has been recognised for significantly increasing Spain's minimum wage. However, her relationship with the country's business community has become more strained over time, and a proposed reduction in the standard working week has yet to be implemented.

She is expected to compete against current ILO Director-General Gilbert Houngbo of Togo. Houngbo's term concludes in 2027, with the organisation's leadership election scheduled for November this year. The Geneva-based ILO develops international labour standards and promotes workers' rights across its 187 member states.

The ILO did not immediately comment on the reported candidacy.

The organisation is currently dealing with financial challenges after the United States outlined plans to withhold contributions for the next fiscal year. As of July 17, the U.S. had outstanding assessed contributions and arrears amounting to 257 million Swiss francs (approximately $315 million).

Houngbo has also faced criticism from staff and some member states over planned organisational reforms and efforts to manage the agency's financial constraints. A senior diplomat told Reuters that Díaz is expected to receive backing from several European countries.

Earlier this month, the White House supported a House spending proposal that would end U.S. funding for multiple international organisations, including the ILO, for the fiscal year ending in September 2027. The proposal is part of broader reductions affecting organisations such as UNESCO, the World Health Organization, and the Organisation for Economic Co-operation and Development. The U.S. Mission in Geneva did not immediately respond to Reuters' request for comment.

Reuters previously reported that the ILO withdrew the appointment of a U.S. official to a senior leadership position due to delayed U.S. payments. The agency has also reduced around 120 positions, paused hiring, and introduced additional cost-saving measures in response to cash-flow pressures.

Established in 1919, the ILO is the only United Nations agency that operates through a tripartite structure, bringing together governments, employers, and workers to develop global labour standards.