Monday, January 21, 2013

Protests become way of life in Spanish recession

By Raquel Castillo Lopez

MADRID (Reuters) - Spanish workers are increasingly walking off the job to protest wage reductions and privatisations by the government as it tackles a steep public deficit that last year threatened to bankrupt the country.

Justice civil servants shout slogans during a protest against government austerity measures, in front of the headquarters of Spain's centre-right People's Party (Partido Popular) in Madrid in this July 30, 2012 file photo. REUTERS/Juan Medina/Files

Judges, garbage workers, doctors and bus drivers are among those involved in a wave of disruptive strikes and demonstrations as workers lose patience with the centre-right government's spending cuts after four years of economic crisis.

Demonstrations have become a daily event in the capital and other major cities in the biggest social upheaval Spain has seen since the transition to democracy in the 1970s.

"The government has put the country on the path to ruin. They are taking away all of our benefits and our purchasing power," said Francisco Garcia, a cleaner and union leader at the General Hospital of Alicante on the Mediterranean coast.

Garcia and his co-workers went on strike for 17 days in January to protest two months of not being paid by the Valencia regional government. The strike - which led to reports of unsanitary conditions - was just one of many recent walk-outs.

In the southern city of Granada, garbage haulers were on strike for two weeks in January to protest cuts in their hours and pay. The strike ended on Sunday, but only a quarter of the accumulated trash has been picked up.

"It's disgusting, there are rats in the street and areas you can't even walk because of the piles of garbage," said Jorge, 50, employee at a bar in Granada, near the famous Moorish palace La Alhambra.

Adding to the outrage is the up-to 100 billion euros in public funds going to bail out banks that loaned recklessly during the property boom while tens of thousands of Spaniards have been evicted from their homes after bank foreclosure.

"They save banks and close hospitals," read a sign at a weekly protest march by thousands of Madrid region health workers and doctors on Sunday.

The protests around Spain have almost all been peaceful, in contrast to the escalating political violence in Greece - another hot spot in the euro zone debt crisis.

Public outrage over tens of thousands of bank foreclosures on mortgage defaulters - including a reports of suicides by desperate homeowners - forced the government to put a moratorium on evictions of poor families.

But other than that largely symbolic gesture, public frustration is not expected to divert Prime Minister Mariano Rajoy's from his drive to cut public spending under deficit cutting targets agreed with the European Union.

With his People's Party's absolute majority in Parliament he can afford to turn a deaf ear to the street despite two general strikes last year.

"The government's strategy is to dig in, not make any concessions and hang on with the hope that the economy begins to pick up at the end of 2013 or in 2014," said Miguel Murado, an independent analyst in Madrid.

On the fiscal front Rajoy has little room to manoeuvre. Although Spain's borrowing costs have come down recently and released some immediate pressure on the premier to seek an international bailout, market volatility could quickly return.

The government must raise more than 200 billion euros in medium- and long-term debt this year while recession drags on and jobs continue to be destroyed. Having made drastic spending cuts last year, he must execute an additional 20 billion euros in budget savings this year, as well.

"Rajoy knows very well that he has to take the tough decisions now," said Narciso Michavila, president of GAD3 consulting group, referring to the political calendar. The PP does not face any regional or local elections this year.

The recession has hit tax revenue which in turn makes it hard to slash the deficit. Retail sales have dropped for 29 months in a row as one out of four workers is unemployed. The economy contracted by more than 1 percent last year and is expected to shrink again this year.

In his first year in office Rajoy broke campaign pledges, raising the sales tax and cancelling inflation raises for state pensions. A recent poll by Metroscopia polling firm showed 74 percent of Spaniards do not believe the government knows how to resolve the economic crisis and Rajoy's PP has only 30 percent support, the lowest since he was elected in November 2011.

SHIFT IN MOOD

Early in the crisis, Spaniards were largely philosophical about austerity measures, accepting that they must pay the consequences for a decade of overspending that glutted the market with a million empty homes and cluttered the landscape with underused highways, airports and trains.

But forbearance has eroded as the deep recession drags on, and the government slashes into treasured benefits such as universal free health care and public pensions.

"In the end we're going to have to leave the country because there's no work here," said Elina Rodriguez, a 20-year-old history student who marched recently in a protest in Madrid against education spending cuts.

Roughly 370,000 people emigrated from Spain in 2011, 10 times more than before the economy faltered in 2008. Every week brings news of major layoffs from companies.

Since the beginning of the year Bankia, one of the country's biggest banks and now owned by the government, announced job cuts; Roca closed a toilet factory in southern Spain; Madrid's public television station laid off close to 80 percent of workers; and the local unit of Vodafone mobile telephone company said it would cut hundreds of jobs.

A plan by the regional government of Madrid to privatise six hospitals has sparked weeks of strikes. Anyone seeking medical care at public hospitals and clinics in and around the capital will find the walls draped with white sheets and banners reading "Public health care, R.I.P."

Workers at money-losing airline Iberia are holding weekly demonstrations in central Madrid against the company's plan to eliminate 4,500 jobs, a quarter of its workforce.

"We used to talk about where we meet every week for an afternoon coffee. Now it's which weekly protest you're going to," said Ana de la Hoz, a flight attendant for Iberia.

Judges, prosecutors and court-workers in December joined protests against plans to charge fees for some court services. And they are threatening a full-on strike this month.

"Something's happening in our country that hadn't happened before," said Jose Luis Gonzalez Armengol, a top judge in Madrid. "It's strange to see judges, prosecutors, lawyers, doctors, nurses and teachers in the street."

(Additional reporting by Iciar Reinlein, Teresa Larraz and Tracy Rucinski; Editing by Fiona Ortiz and Anna Willard)

News

Monday, January 21, 2013

Protests become way of life in Spanish recession

By Raquel Castillo Lopez