Spanish minister enters race to lead UN labour agency, amid US funding concerns

GENEVA, July 23 - Spain on Thursday nominated Labour Minister Yolanda Diaz to head the United Nations labour agency, potentially making her the first woman to lead the organisation, as it faces a financial crisis over U.S. non-payments.

The Spanish government said Diaz's candidacy for the top job at the International Labour Organization reflected her record of labour reforms, including measures that have helped reduce temporary employment and contributed to record levels of employment in Spain.

"Yolanda Díaz has driven some of the most significant labour and social reforms of recent years, all of them achieved through social dialogue and resulting in 30 agreements," it said in a statement.

Diaz, who founded the multi-party left-wing coalition Sumar in 2023, is credited with substantially raising the minimum wage, although her relations with Spain's business lobby have progressively soured. She has also yet to deliver on a promise to shorten the working week.

Diaz is expected to challenge incumbent Director-General Gilbert Houngbo of Togo for the top job at the Geneva-based agency, which sets international labour standards and promotes workers' rights across its 187 member states.

Houngbo's term ends in 2027, and an election is scheduled for November this year.

The ILO did not immediately respond to Reuters' request for comment.

The organisation faces mounting financial pressure, as the U.S. has outlined plans to not pay its contributions for the next fiscal year. Long the ILO's largest contributor, the U.S. owes 257 million Swiss francs ($315 million) in assessed contributions and arrears as of July 17.

Houngbo has faced criticism from staff and member states over plans to reform the organisation and respond to its cash-flow shortfall.

A senior diplomat told Reuters that Diaz's candidature would get support from many European states.

Earlier this month, the White House backed a House spending bill for the next fiscal year, which ends in September 2027, that eliminates U.S. funding for several international organisations including the ILO, as part of broader cuts affecting bodies 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 a Reuters request for comment.

Reuters reported in June that the agency has rescinded the appointment of a U.S. official to a senior leadership role because of delays in U.S. payments, highlighting the cash-flow problems that have forced it to cut 120 jobs, freeze hiring and implement other cost-cutting measures.

Founded in 1919, the ILO is unique within the U.N. system in bringing together governments, employers and workers through a tripartite structure to develop global labour standards. REUTERS