Spanish strike tests tolerance for austerity

Reuters , Thursday 29 Mar 2012

Spanish workers strike against labor reform saying it makes it cheaper for companies to fire people and dismantles system of collective bargaining

A demonstrator sprays grafity on a wall during the general strike in Barcelona, Thursday. The Spanish sentence reads: "The Labour reforms means slavery" (Photo: AP).

Spanish unions said a high turnout for a general strike to protest government budget cuts and reforms on Thursday had almost brought heavy industry to a halt while the government said the day was proceeding normally.

Spaniards have been tolerant of Prime Minister Mariano Rajoy's efforts to meet strict European deficit goals but he has promised an austere 2012 budget on Friday and the strike shows that patience may be wearing thin.

The two main unions, Comisiones Obreras and UGT, said the action had "practically paralysed" factories during the night shift while 85 percent of workers in the food sector were also taking part.

Data from national grid operator REE showed demand for power was about 20 percent below expected at 0740 GMT.

Interior Ministry spokeswoman Cristina Diaz said most morning commuters were turning up for work as normal.

"Calm and attendance have been the day's common denominator since six o'clock in the morning," she told journalists.

The police had made 58 arrests since the strike began at midnight, she said. They were mainly people taking part in picket lines to stop night shift workers getting to jobs in public transport, factories and wholesale markets.

Transport employees provided a previously agreed basic level of service, meaning one in four buses and about a third of underground and local trains were expected to run but only 10 percent of domestic flights and 20 percent of European flights.

"I'll help out with minimum services and then I'll join the strike," said train driver Miguel Pastor, 40, at Madrid's main line Atocha station.

"The labour reform has taken away workers' rights my parents managed to win. This strike is just a starting point for protests and I see things ramping up in the coming months."

Spain is now tipping into its second recession in three years and some observers expect at least another million people to join already swollen unemployment lines.

Unemployment is already the highest in the European Union at 23 percent and half of workers under 25 are jobless.

Polls had predicted only 30 percent of workers would join Thursday's one-day strike against labour reform, but a surprise electoral setback for the ruling People's Party (PP), at two regional elections on Sunday may spur wider participation.

"Sunday's election results are a sign that the population won't accept these kinds of reforms ... and could mark the start of a new cycle with more active opposition to policies than we've seen in recent months and year," economics professor at Spain's Santiago de Compostela University Xavier Vence said.

Spain's last general strike in September 2010, had limited impact beyond disruptions in transport and on factory production-lines as Spaniards resigned themselves to the then-Socialist government's austerity drive.

Left-leaning political website said this week the strike might help Rajoy in his dealings with European leaders anxious to contain the continent's debt crisis.

"If we Spaniards accept this abuse with resignation, apathy and docility, the government won't have the will or the arguments to stand up to Brussels and Berlin," said.

Spanish unions called Thursday's strike to protest a jobs reform that makes it cheaper for companies to fire people and dismantles the nationwide system of collective bargaining.

But union power has been slowly disintegrating, with fewer than a fifth of Spanish employees currently affiliated with the country's two biggest unions, Comisiones Obreras and UGT.

"Under the circumstances the unions have to do something, but they don't really think it will do any good," said Jose Ramon Pin, professor at business school IESE.

Economy Minister Luis de Guindos dismissed unions' calls to change it. "Regardless of whether (the strike) is considered a success or failure, the government is not going to alter the reform one jot," he said on Wednesday.

The very fear of job loss may be a major deterrent for many workers. "I've been waiting half an hour for the bus, but I have to go to work. I have a little girl and cannot stay away. The strike won't do anything to solve the crisis," said 35-year-old office worker Alma Callet at Madrid's Atocha station.

Former PP Prime Minister Jose Maria Aznar backed down on his labour reform plans in 2002 after a general strike that shut down a large part of the country.

And following Sunday's regional election result, which denied Rajoy the absolute majority he had hoped would reinforce his mandate for spending cuts, the prime minister will have to measure his next steps to avoid sparking more protests.

He said on Tuesday his administration would pass a "very, very, austere budget" and this year's deficit reduction goal of 5.3 percent of gross domestic product implies nominal cuts of at least 35 billion euros ($46.63 billion).

The strict budget is meant to keep borrowing costs down as well as working towards the EU deficit limits, but some economists say spending cuts will deepen the expected recession.

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