Spain braced for general strike, but impact may be limited

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Forced to impose unpopular measures to fix a battered economy, Spain's Socialist government faces a general strike on Wednesday amid union anger over what they see as a policy U-turn.

But many view the government's tough labour reforms and belt-tightening measures as inevitable, and even necessary, and a low turnout is expected.

A poll published Friday in the newspaper Publico said only 18 percent of workers backed the strike, and 71 percent believed it would not force the government of Prime Minister Jose Luis Rodriguez Zapatero to change course.

"The aim of the strike is not to force him to resign, but to change his policies ... to drop this new avatar, this reincarnation," Candido Mendez, the head of the UGT union, said of Zapatero.

"The prime minister, in his heart of hearts, is aware that he must change," said Ignacio Fernandez Toxo, the head of the other main union, CCOO.

Zapatero, who is still a member of the UGT, maintained a cosy relationship with the two unions after he first took office in 2004.

But that began to turn sour after he entered his second term in 2008, and the economy slumped into recession as the once-booming property sector collapsed.

It only emerged in the first quarter of this year with tepid growth of 0.1 percent.

The recession has sent the country's unemployment rate has soaring to more than 20 percent, the highest in the 16-nation euro zone.

The rise in joblessness has in turn jacked up government spending on unemployment benefits, pushing Spain's public deficit to 11.1 percent of gross domestic product last year, the third-highest in the eurozone after Greece and Ireland.

The government on Friday approved a tough austerity budget for 2011 aimed at reassuring nervous markets over its ability to rein in the massive public deficit.

The proposals, which include new tax hikes for the wealthy, must now go to parliament, where the government does not hold an absolute majority but is hopeful of ensuring its successful passage.

"It is the most austere budget in recent years," Finance Minister Elena Salgado told a news conference following a cabinet meeting.

It envisages an overall cut in government expenditure of almost eight percent compared to this year.

In earlier action this year the government in May passed a 15-billion-euro (19-billion-dollar) austerity plan to shore up public finances amid investor concerns it could follow Greece into a financial crisis.

It included an average state employee salary reduction of five percent and a pensions freeze.

That was on top of a 50-billion-euro package of spending cuts announced in January designed to progressively slash the public deficit to the eurozone limit of three percent of gross domestic product by 2013.

Spain's parliament on September 9 gave final approval to a sweeping overhaul of its rigid labour market, which will make it easier and cheaper for employers to hire and fire workers.

"It's evident that the Spanish government has taken decisions that, in our opinion, are essential to confront the challenges that the Spanish economy faced during the crisis," Zapatero told the Wall Street Journal last week.

The International Monetary Fund has said labour reforms are "absolutely crucial" if Spain is to cut its jobless rate and rein in its massive public deficit.

But the UGT and CCOO, which together have around two million workers, slammed the measures as a "backward step" and an about-face by Zapatero, who had vowed to protect social policies despite the economic crisis.

In June they announced a 24-hour general strike for September 29 in protest. They are also angry over the spending cuts and plans to gradually raise the retirement age to 67 from 65.

It will be the country's first general strike since 2002 and the first since Zapatero took office.

The unions on Thursday struck an unprecedented deal with the government to ensure minimum services.

The agreement provides for a minimum of 20-40 percent of international flights, 20 percent of high speed trains and 25 percent of district trains, including 30 percent for morning rush hour.

Between one and three inter-city buses will be allowed to run in each city, it says.

The country's last major strike, by civil servants on June 8 to protest the pay cuts, had little impact.

The strike will come a day before the government's tough 2011 budget proposals are presented to parliament.

© 2010 AFP

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