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MADRID, May 12 (Reuters) - The Spanish cabinet passed a decree on Friday aimed at liberalizing the country's ports, a second effort at a contentious law which has already been rejected by parliament and prompted threats of widespread strikes.
The Mediterranean's largest ports, Valencia and Algeciras, alongside the smaller port of Barcelona, help shift about two thirds of Spain's imports and exports.
Prolonged industrial action could badly hurt Spain's exports, which are worth about a third of economic output and were key in dragging the country from recession following the 2008 property market crash.
The law has been amended since its last iteration, which was blocked by the opposition in parliament, and must now return to the lower house for approval.
Prime Minister Mariano Rajoy's People's Party (PP) must win support from smaller parties in parliament, especially centre-right Ciudadanos which has 32 seats, as he does not have a majority.
Ciudadanos, which said on Friday it had not seen the most recent proposal, previously abstained on the vote, denying the government the simple majority it needed in the 350-seat parliament.
The government plans to present the reform to parliament on May 18, Minister of Public Works Inigo de la Serna told a news conference on Friday.
"We're optimistic the law will be passed," he said, adding the government had talked to opposition parties about the bill.
He would not say which groups had agreed to change their position on the reform.
Spain is under pressure from the European Commission to pass the reforms and has already paid more than 21 million euros ($23 million) in fines since 2014 for failing to bring port labour practices in line with EU regulation. That fine could rise if the reform is not brought in to effect.
The previous decree caused uproar among unions who called several strikes to protest the reform, which aims to end a closed shop system at the ports. Companies currently have no say over hiring and firing on Spanish docks.
Speaking before the announcement, the port representative in Spain's second largest union, the UGT, Francisco Nunez, said any attempt to pass the reform without consulting the unions would likely prompt further strikes. ($1 = 0.9195 euros) (Reporting by Paul Day, Editing by Angus Berwick and Angus MacSwan)