Palma.—Proposed new IVA (VAT) increases from eight to 18 percent, wage freezes and the over all refusal by management to agree to union proposals for new contracts for hostelry sector workers has not only angered the workforce here in the Balearics, the indignation has spread, with some of Spain's top tourists resorts yesterday announcing that hotel, bar, restaurant and even shop workers will take industrial action on July 20 in solidarity with colleagues here in the Balearics.

What is more, senior shop stewards and unions leaders warned of a summer of continued industrial action with coach drivers also planning two days of strike action next month.

Shock waves
The move has sent shock waves through the travel industries across Europe with the fears of holiday disruption beginning to make front page news.
In Palma, the Balearics government made it clear yesterday that it does not approve of any further hikes in IVA, primarily because of the danger it, along with an increase in airport taxes next month, will do the tourists industry- the region's lifeline.

But, Madrid is under massive pressure from Brussels to make such moves if it wants more bailout funds.
Balearic government spokesman, Rafael Bosch, yesterday called for unions to use “common sense” and for both sides locked in the talks to be “responsible” and consider the consequences of a summer season disrupted by industrial action and with reports from inside the Balearics tourist industry that cancellations are now being made by concerned holiday makers. The trouble is that, now the strike threats have hit the headlines, a sizable amount of damage has been done to the Balearic holiday market which still has a stack of holidays to shift for July and August.

Prices have been slashed as Britons rush to flee the dreadful weather, but holidaymakers do not want to have their summer breaks ruined by strike action.

That said, the Balearics said yesterday that it does not intend to interfere in the disputes between the unions and the management but will instead work on ensuring that minimum services are in place should the strikes go ahead.

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