Spain Goin' Ham

On March 29th a general strike was called for by Spain's two main trade unions, UGT and CCOO, in response to a recent overhaul of labor laws that make it easier for employers to hire and fire employees. While hundreds of thousands of Spaniards showed up for demonstrations throughout the nation, support for the trade unions is dwindling due to their failure to prevent the surge in unemployment and controversy regarding the unions' reliance on government subsidies. As far as the actual impact of the protests, while heavy industry and large parts of the transportation network were disturbed by the massive protests, it seems as though the protests made a minimal political impact. Francisco Pérez, a former union representative, states that the strike was a "useless response to the problems that Spain is facing." Pérez additionally questioned, "What is the point of a strike before even knowing what kind of budget this new government has put together and when unions have presented no alternative proposal to create jobs? The union leaders are nowadays clueless because they prefer to sit on the board of a bank than work alongside those they should be representing."

Furthermore, the protests came on the eve of Rajoy's budget cut announcements. On March 30th Rajoy unveiled plans for the largest budget cuts since Spain's return to democracy in 1978. Rajoy's promised deficit reduction of 3.2% of the GDP would be the the largest since 1980. In order to avoid succumbing to Europe's current debt crisis, Rajoy is risking a deeper recession that would be catastrophic to a nation already in a financial quandary. The majority of the budget cuts are expected to come from tweaking of loopholes of tax exemptions for various corporations and households as well has a multitude of cuts in spending by the central government, primarily in healthcare and education.

Questions for the class:
1) Was there any purpose for the general strike on Thursday? Did it actually accomplish anything? How do you think American would reply to a 23% unemployment rate and an ineffective government?
2) How will Rajoy's budget cuts affect the economy? Is Rajoy jeopardizing the Spanish economy simply to appease the EU?

 


http://www.nytimes.com/2012/03/30/world/europe/spain-hobbled-by-general-strike.html

http://www.bloomberg.com/news/2012-03-29/rajoy-to-unveil-deepest-spanish-budget-cuts-in-30-years.html