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Latest update : 2010-05-20

Spain prepared itself Thursday for demonstrations by public sector workers disgruntled by a tough government austerity plan announced last week that will slash their wages by 5 percent from June.

AFP - Spain braced Thursday for street protests by public service workers against a tough government austerity plan aimed at reining in the public deficit amid fears of a Greek-style debt crisis.

The country's main unions have called for demonstrations in front of government buildings throughout the country at the same time as the government is set to approve the belt-tightening plan Thursday evening.

Socialist Prime Minister Jose Luis Rodriguez Zapatero announced the measures last week, worth 15 billion euros (18.5 billion dollars) over two years.

They include a five-percent pay cut for public sector workers from June, a freeze on state pensions and a wage freeze from 2011.

The plan comes on top of a 50-billion-euro austerity package announced in January designed to slash the public deficit to the eurozone limit of three percent of gross domestic product by 2013 from 11.2 percent last year.

The government is under pressure to take action from both its EU partners and from the markets, which fear Spain could follow in the footsteps of Greece, which received an unprecedented 110-billion-euro bailout by the EU and the IMF earlier this month to save it from bankruptcy.

"Spain is in a very difficult situation because it is potentially concerned" by the debt relief package, Germany's Interior Minister Thomas de Maziere said on Wednesday, referring to a 750-billion-euro fund agreed by eurozone members last week to help debt-ridden countries.

But the CCOO union has charged that the government had "yielded to pressure from financial markets" and "is leading the country to disaster."

It and the country's other main union, the UGT, have also called a general strike of public service workers on June 8 to protest the austerity cuts.

Zapatero said Sunday his "responsibility ... is to think of the future of my country, rather than any political or personal future."

A new opinion poll on Sunday showed the cuts have triggered a nine-point plunge in support for his Socialist Party compared to the conservative opposition Popular Party.

The poll found that Spaniards approve of the pay cut for public workers, but two-thirds opposed the pension freeze, and three-quarters thought the measures will be insufficient to get Spain out of its crisis.

In an apparent bid to shore up public support, the prime minister on Wednesday said he plans new tax hikes for the rich.

"I believe most citizens consider this effort (to reduce the deficit) must be hardest for those who have the most," he said.

Spain entered recession in the second quarter of 2008 as the global financial meltdown compounded a crisis in the property market, which had been a major driver for growth in the preceding years.

Official data Wednesday showed the economy scraped out of recession in the first quarter, boosted by a rise in exports and household spending, but analysts have warned that any pick-up could be short lived.

Date created : 2010-05-20


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