- Title: SPAIN: Country set for second general strike in a year
- Date: 12th November 2012
- Summary: MADRID, SPAIN (FILE - OCTOBER 2012) (REUTERS) VARIOUS OF THOUSANDS OF LABOUR UNION MEMBERS MARCHING THROUGH STREETS CARRYING RED FLAGS
- Embargoed: 27th November 2012 12:00
- Keywords:
- Location: Spain
- Country: Spain
- Topics: Business,Employment
- Reuters ID: LVA4VCQDIHB3203S2AUNICG8V2HX
- Story Text: Spain's two largest labour unions have called a general strike for Nov. 14, the second against the conservative government since it took power in December making it the first time in the country's history that two general strikes have been staged within the same year.
The strike in Spain coincides with industrial action in Portugal and Greece on the same day and comes amid rising social unrest over massive unemployment - over 25 percent - and deep austerity measures designed to slash Spain's public deficit.
"The cuts aren't limited to Spain. They are happening in the whole European Union. That's why it is important that all Europe protest against these cuts and against this way to do politics," said Nuria Manzano from the UGT union.
Public transport is expected to run with minimum services established by law but likely to cause disruptions in Madrid, the Spanish capital.
Although discontent amongst Spaniards is on the rise and public protests are daily occurrences, not everyone believes a second general strike will solve the country's economic situation.
For Sigfredo Saenz, a Navy officer, the damage caused by the austerity measures has already been done and there is no going back.
"It will not be very useful. I think with this strike everything has already been done and as much as we can protest we cannot resolve anything," he said.
Others, like lawyer Marios Sarbu who has been living in Spain for ten years, think it is essential to take a stance against the cuts in order to maintain Spain's welfare state, especially public education and health.
"Cuts in health, cuts in education, we consider all those rights must remain and Spain's welfare system must remain as it was," he said.
The date chosen for the walkout is just days before the anniversary of the Nov. 20 general election last year that swept Prime Minister Mariano Rajoy's government to power in a landslide victory over the Socialists.
Spain has been the main focus of the three-year-old euro zone debt crisis for the last nine months and has already obtained a credit line of up to 100 billion euros for its banks from the European Union, a move which has sparked anger amongst the population who feels their taxes are being used to prop up mismanaged banks, while people lose their jobs and their homes as they are asked to tighten their belts even further.
On July 11, Rajoy announced a swathe of new taxes and spending cuts designed to slash 65 billion euros from the budget deficit by 2014 as recession-plagued Spain struggled to meet tough targets agreed with Europe.
The announcement was on the same day as the arrival to the Spanish capital of thousands of miners staging a protest against cuts in subsidies to the mining sector that are putting many out of work. The new measures also sparked a series of spontaneous protests by public servants throughout the streets of Spain over the sunsequent week as they saw their salaries and benefits cut by the new measures.
July also saw the yield on Spain's benchmark 10-year bond jump higher than 7 percent, leading Spain to come very close to having to request a full bail-out.
The 10-year bond has come down in anticipation of ECB action and is currently about 5.6 percent, yet the dominant view among investors, analysts and sources involved in talks on the issue is that the market relief is only temporary unless the ECB actually acts.
With yields improving, Rajoy has given continued signs he will not rush to request aid unless market conditions take a significant turn for the worse.
Rajoy also has domestic resistance to consider. A rescue could come with demands for more budget cuts, opposed by demonstrators who march in the capital several times a week.
CCOO union leader Ignacio Fernandez Toxo however thinks Rajoy is dragging his feet on requesting a bailout because, not only does he not know the conditions Europe will impose, but because he has political considerations with the upcoming regional elections in Catalonia on November 25.
"The government doesn't know if they will be able to raise pensions because it doesn't know what new demands German chancellor will impose, what new demands the European Central Bank will impose, whether it will request a bailout or not, before or after the Catalan elections," Toxo said.
Sources familiar with Rajoy's thinking have said he wants to make sure conditions attached to a rescue are minimal, and that the aid would not just create more risks for Spain.
Savings from previous austerity measures, which include public wage cuts and lower spending on schools and hospitals, have so far been eaten up by higher unemployment and social security payments and interest payments on public debt.
As unemployment continues to grow - October figures showed jobless numbers increasing for a third consecutive month - analysts say it is not surprising that public protests are growing. However, the impact a second general strike in the same year could have on turning back government policy is debatable.
"A substantial amount of people are really suffering at the moment, whether a second general strike is justified I think is debatable. I mean obviously there has to be some kind of protest because people are having a very bad time, but I think whether another general strike is justified I think is questionable," Nigel Townson, professor at Madrid's Complutense Univeristy, said.
Spain's central government must raise 207 billion euros in debt next year, plus a possible additional 20 billion euros to cover finances of indebted regional governments. Analysts say it may be tough to meet those needs without external aid.
Whether Rajoy decides to request a bailout or not, he faces the gargantuan task of trying to keep an electorate that is growing poorer and more frustrated on side while markets and Europe demand that Spain puts its accounts in order.
mad/jrc - Copyright Holder: FILE REUTERS (CAN SELL)
- Copyright Notice: (c) Copyright Thomson Reuters 2012. Open For Restrictions - http://about.reuters.com/fulllegal.asp
- Usage Terms/Restrictions: None