Spaniards strike against "unstoppable" job reforms

MADRID/BARCELONA (Reuters) - Spanish workers staged a general strike on Thursday to protest against labor reforms which the government declared "unstoppable" but many ignored the action, fearing for their jobs in a country with the EU's highest unemployment rate.

Factories across the nation were silent and ports closed, while television and transport were disrupted by the strike against the austerity policies of Prime Minister Mariano Rajoy - whom Spaniards elected by a landslide only four months ago.

Police arrested a number of protesters in Madrid while small-scale violence flared in Barcelona, Spain's second city. Tourists were locked out of the Alhambra, a 14th-century Moorish palace in the southern city of Granada which is one of Europe's great cultural monuments.

Strikers promised a wave of protests to confront Rajoy's conservative government over reforms making it cheaper for companies to fire staff and dismantling a nationwide system of collective pay bargaining.

"We don't have much hope, but this is just the beginning," said Trini Cuesta, a 58-year-old employee at a public hospital in Barcelona. "It's not just about labor reform, we're against policies that are provoking social and economic ruin. Social protests must rise."

Spain is tipping into its second recession since the end of 2009 and some observers expect at least another million people to join already swollen unemployment lines. The jobless rate is already 23 percent and almost half of under 25-year-olds are out of work.

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For an interactive timeline on Austerity protests click on http://link.reuters.com/pys56s

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"UNSTOPPABLE" REFORM

Rajoy's government said it was committed to making labor reforms which it argues will help to reduce unemployment by making the labor market more efficient. "The agenda for reform is unstoppable," Labor Minister Fatima Banez said on Thursday.

Police presence was particularly heavy around parliament where politicians were putting in a longer work day than usual as Rajoy sought approval for five different measures, including funding for indebted local governments to pay suppliers.

Spaniards have so far been tolerant of Rajoy's efforts to reform the labor market and meet strict European Union-imposed deficit goals to ensure it avoids a Greek-style debt crisis.

But the general strike, the first since September 2010, showed that patience may be wearing thin. The largest union put support for the strike at 77 percent while the government said the work day was proceeding normally but gave no overall tally.

Spain's blue chip index fell 0.87 percent, its eighth consecutive session of declines as concerns over the country's finances returned.

There were pockets of violence in Barcelona, where protesters set garbage bins on fire and threw chairs from the famed outdoor cafes of Spain's second largest city onto the street, but no injuries were reported.

Union members waving red flags gathered in major cities where they plastered stickers on shop windows reading "Closed for Strike", though many remained open for business.

Police barricaded parliament and arrested 58 people in Madrid, many of whom were trying to stop people going to work.

FIRING FEARS

Many workers crossed the picket lines, saying they feared losing their jobs or unwilling to lose the average of around 100 euros which will be docked from the pay cheques of the strikers.

While many Spaniards are fighting to preserve protection for their jobs, others are on short-term contracts of typically six months with little protection.

These workers fear their employers could punish strikers by failing to renew their contracts when they expire, and give the job instead to one of the army of unemployed.

Fewer than a fifth of Spanish employees are currently affiliated with the country's two biggest unions and many feel they don't represent the wider workforce.

"A lot of people actually blame the unions in part for the rigidity in the labor market and lack of competitiveness, so they aren't exactly in the position to rally a lot of people and the support for the strike reflects that," said David Bach, political analyst at IE business school in Madrid.

However, union members are ready for a long fight. "This is the largest cut of (workers') rights since anyone can remember. There has to be a better way to get out of this crisis," UGT union employee Marta Lois, 40, said on Madrid's main street Gran Via, where protesters blocked traffic early on Thursday.

"Don't forget this is just the first major event of what is likely going to be a long year of demonstrations against government policies," Antonio Barroso, political analyst with Eurasia Group said.

Rajoy said on Tuesday his administration would pass a "very, very, austere budget" on Friday. His goal of cutting the deficit this year to 5.3 percent of gross domestic product implies nominal cuts of at least 35 billion euros ($46.63 billion).

The cuts are meant to keep borrowing costs down as well as working towards meeting the EU's 3 percent deficit limit next year, but some economists say they will deepen the looming recession.

CHANCE FOR A DIFFERENT PATH

The strike halted overnight production at factories from Barcelona in the north to Cadiz in the south, with unions reporting full stoppages at General Motors Espana, Renault, ArcelorMittal and Acerinox.

Transport employees provided a basic level of service, meaning one in four buses and about a third of metro and local trains were expected to run. Most domestic and European flights were grounded although long-haul services continued.

"We're offering the government a chance to start a different path (of reform) in search of wider consensus," Ignacio Fernandez Toxo, head of Spain's largest union Comisiones Obreras said. "If not there will be rising social conflict."

Despite the promises to push on with reforms aimed at winning approval from Brussels, Rajoy's People's Party suffered a surprise setback in a regional election on Sunday, meaning he must measure his steps to avoid provoking wider discontent.

A high turnout is expected at an evening march in Madrid that will end at the central Puerta del Sol square, cradle of last year's anti-austerity "Indignant" movement.

National grid operator REE estimated electricity demand - a key indicator of economic activity - for Thursday as a whole would drop by 14.8 percent from Wednesday to 571 gigawatt-hours, a level comparable to a public holiday or a weekend.

During the last general strike in September 2010, demand fell by 12.6 percent from the day before.

(Additional reporting by Emma Pinedo, Nigel Davies, Paul Day, Martin Roberts, Blanca Rodriguez and Feliciano Tisera; writing by Tracy Rucinski; editing by Paul Day and David Stamp)

Source: http://news.yahoo.com/spanish-strike-test-tolerance-austerity-055258952.html

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