Spain engulfed by nationwide anti-austerity strike

By Daniel Woolls

Associated Press

Published: Thursday, March 29 2012 12:00 a.m. MDT

A demostrator is seen injured after clashes with a riot police during the general strike in Barcelona, Thursday, March 29, 2012. Spanish unions angry over economic reforms are waging a general strike, challenging a conservative government not yet 100-days old and joining other troubled European workers in venting their frustration on the street.

Manu Fernandez, Associated Press

MADRID — Spanish workers enraged by austerity-driven labor reforms to prevent the nation from becoming Europe's next bailout victim slowed down the country's economy in a general strike Thursday, closing factories and clashing with police as the new-center right government tried to convince investors the nation isn't headed for a financial meltdown.

Tens of thousands held protest marches in Madrid and other cities, and the demonstrations turned violent in Spain's second largest city of Barcelona, where hooded protesters smashed bank and storefront windows with hammers and rocks and set fire to streetside trash containers.

Traffic was slowed in northeastern Valencia when demonstrators lit mattresses ablaze on a highway, and a Molotov cocktail was hurled at a police car in the eastern city of Murcia. Authorities arrested 176 protesters across Spain and said 104 people were injured in clashes, including 58 police officers. There were no immediate reports of serious injures.

The protests came a day before Prime Minister Mariano Rajoy's administration is expected to announce about €30 billion ($40 billion) in spending cuts and tax hikes to ease increasing fears about Spain's budget deficit. European leaders insist drastic cuts must be made this year even though reductions in government spending are almost sure to boost the unemployment rate of nearly 23 percent, the highest among the 17 nations that use the euro.

The labor reforms make it less costly for Spanish businesses to fire workers, and give them incentives for hiring — but protesters said they are being forced to give up rights they earned decades ago.

"Why wouldn't I protest?" asked textile worker Jose Jimenez, 60, from the Madrid protest. "I've spent 45 years working for the same company and now they can get rid of me almost for free."

Others said the reforms put in place by Rajoy in February after his conservative Popular Party ousted the governing Socialists in November will only boost the profits of companies and banks.

"Workers are losing all their rights, and the benefits will go only to the banks and the businesses," 57-year-old bus driver Fidel Martin said.

Labor unions said millions of Spaniards in the nation of 47 million stayed away from work to protest, and the strike caused transportation delays and prompted Spain's government-run national health care system to significantly reduce services except for emergency cases. Workers at car factories that assemble vehicles for Renault SA, SEAT SA, Volkswagen AG and Ford Motor Co. largely stayed home, and services at mining and port facilities were also severely limited, union leaders said.

But many other businesses remained open, and Rajoy's government claimed the strike didn't have its intended impact because Spanish electrical consumption dropped only 16.3 percent, not as much as the 16.9 percent reduction when the country's last general strike was held in 2010 when the Socialists were in charge.

Union leaders demanded a "gesture" from the government to scale back the reforms, warning they could cause more unrest starting in May. Members of Rajoy's administration said they are willing to talk with union leaders, but won't issue concessions.

"There is no stopping on the path to reform," Labor Minister Fatima Banez said.

The cuts expected Friday are designed to lower the national deficit to within European Union limits and reassure jittery international investors who determine the country's borrowing costs in debt markets — and could well determine whether Spain will follow Greece, Ireland and Portugal in needing a bailout.

Spain's benchmark borrowing rate — the yield on its 10-year bonds — continued to creep up Thursday, to 5.4 percent, suggesting increasing investor concern about whether the country can avoid a bailout, one that European leaders and experts say could lead to the breakup of the Eurozone. Spain's economy is twice the size of Greece, Ireland and Portugal.

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