Italian, Spanish unions mobilise against cuts

AFP , Tuesday 6 Sep 2011

A general strike in Italy and protests in Spain against proposed government austerity measures

Unions mounted a general strike in Italy and planned mass protests in Spain on Tuesday as they battled government efforts to tackle the debt crisis in two of the eurozone's most beleaguered economies. Parts of Italy's public transport network ground to a halt and major attractions such as the Colosseum in Rome were closed by the strike as tens of thousands of workers took to the streets across the country.

"This is a plan the country doesn't deserve," said Susanna Camusso, head of the largest CGIL union, as she led a march through Rome hours before Prime Minister Silvio Berlusconi's austerity package was to go before the Senate. And in Spain, whose jobless rate is the highest in the industrialised world at nearly 21 per cent, unions were to take to the streets in a show of force against a constitutional amendment to ensure that budgets are balanced.

The protests came a day after Europe's stock markets saw sharp falls in share prices, including by more than three percent in Italy and Spain, amid growing fears of recession. There was a slight rally in early trading Tuesday.

The European Central Bank had to step in last month and buy tens of billions of eurozone bonds after investors fled Italian and Spanish debt and sent their borrowing costs to unsustainable levels.

Berlusconi unveiled a 45.5-billion-euro ($65.6-billion) austerity package last month but he is struggling to get parliamentary approval, and recently backed down on part of a pension reform following public disapproval.

Berlusconi's proposals have been heavily criticised by the opposition and unions for hitting the weakest and poorest, particularly its pension reforms.

Their anger was further stoked when the government dropped a proposal for a levy on high earners which had been part of the original austerity package.

As well as the protest in Rome, more than 10,000 were taking part in an anti-austerity demonstration in Florence, and other marches were underway in Genoa and other towns and cities across Italy.

"We are on the edge of the abyss, we need responsible government," said Camusso, as a colourful, banner-wielding column of tens of thousands of workers weaved its way through Rome.

The eight-hour general strike caused major disruption to public transport, with airlines, trains, buses, and ferries announcing cancellations and delays.

The strike was also affecting hospitals and postal services. Schools were unaffected with classes yet to begin for the year.

Berlusconi's centre-right cabinet adopted the draft austerity plan on 12 August in a bid to calm market panic and bring Italy's budget into balance in 2013 instead of 2014 as planned earlier.

Parliament is widely expected to adopt the plan later this month. In a speech on Tuesday, the head of the World Bank kept up the pressure on eurozone governments to get their economies back on track, saying the ECB's bond buy-up would only provide a certain amount of breathing space.

"We're reaching a key decision point for European leaders," Robert Zoellick said in Singapore.

Spain's upper house of parliament is almost certain to approve a constitutional change on Wednesday that will enshrine balanced budgets.

Prime Minister Jose Luis Rodriguez Zapatero is desperately trying to calm market nerves about Spain's ability to service its annual deficits.

But two of the country's biggest unions, the Labour Union and General Workers Union, are demanding a referendum on the reform and have been joined in their campaign by the "indignant" protest movement.

The unions are expecting tens of thousands of people to take to the streets in marches at the end of the working day. Government spokesman Jose Blanco said Madrid was "very worried" because some countries were failing to meet their deficit-reduction targets, and this was affecting investor attitudes to Spain.

Under the constitutional change, Spain must stick to a long-term deficit cap except in times of natural disaster, recession, or extraordinary emergencies and even then only with approval of the lower house. An accompanying law to be enacted by June 30 next year would set the actual figure for the structural deficit at 0.4 percent of annual gross domestic product from 2020.


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