Spanish labor not taking to those new austerity measures too well

posted at 6:06 pm on July 11, 2012 by Erika Johnsen

Spain’s recent financial and economic woes in the midst of the wider eurozone crisis require that they make some tough decisions about where and how they’re going to rein in their budget problems. The government announced more planned austerity measures on Wednesday morning, which they hope will cut their budget deficit by $80 billion through 2015 — even while they estimate that the eurozone’s fourth-largest economy is more likely to contract than grow for the next several years.

In an impassioned address to parliament, Mr. Rajoy called on all Spaniards to back the measures, which include a value-added tax hike to 21% from 18% and cuts to jobless benefits and public sector wages, saying Spain’s economic situation is “extraordinarily serious.” …

The austerity steps build up on previous cuts that have already led to an income-tax hike as well as steep budget reductions for all ministries. They also come as Spanish officials are separately negotiating detailed conditions for the EU’s bank bailout that may force Madrid to give up most of the control over its banks to European institutions, and impose losses on holders of banks’ subordinated debt. …

The new measures also include a cut in jobless benefits for new claimants, a significant step in a country where unemployment represents almost 25% of the workforce, and a salary cut of around 7% for central government employees. The measures also seek €3.5 billion in savings linked to public services provided by local governments. …

Since Mr. Rajoy’s conservative Popular Party has a strong majority in parliament, he isn’t expected to find significant challenges in getting the measures approved. … Recent polls have shown that austerity is having only a moderate negative effect on Mr. Rajoy and his conservative party.

Spain is indeed in dire straits (25 percent unemployment is certainly nothing to sneeze at!), and economic contraction is going to mean very real material hardship for many. Per that last paragraph, it seems like the Spanish are generally taking the tough news pretty well — they’re not yet running amok calling to elect more socialists into office like a certain snooty neighbor of theirs. But, we saw how many of Greece’s public employees and labor-union workers reacted to the reality that there was no more recourse for free-money entitlement handouts, and it’s a sentiment that apparently spans national boundaries.

As the miners marched down the city’s main boulevards, chanting, waving banners, brandishing sticks and setting off fire crackers amid clouds of thick smoke, they were confronted by riot police.

Some threw and bottles at the police who were trying to contain them. Volleys of rubber bullets were fired into the crowds in response, with dozens of protestors led away in handcuffs, some with blood streaming down their faces. More than 20 people were injured, including police officers, demonstrators and onlookers. …

Gathering outside the Ministry of Industry later, amid placards emblazoned with slogans against the cuts and the ruling conservative Popular Party government, Carlos Marcos, 41, a miner since the age of 18, warned: “If they don’t pay attention to us, we’ll be back – with dynamite.”

…Yikes. This is undeniably going to be a hard time for Spain, and will only continue to be so while other European countries keep skirting austerity and spending money like drunken sailors, but it would only be worse if they continued to put off the inevitable — and the rioters can be sure to thank big-government, central-planning, entitlement-crazed socialistic policies when they get a chance.

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