Palma.—Unions have announced a national day of protest as workers rained down criticism on a new 65-billion-euro austerity package yesterday.
Obliged by Brussels to order new cuts and tax increases to meet newly relaxed deficit-cutting commitments, Prime Minister Mariano Rajoy revealed the latest blow to Spaniards this week.

Adding to the pain of recession and a 24.4-percent jobless rate, he announced a string of measures including a rise in VAT sales tax, lower jobless benefits, and reduced income for government workers.

The two biggest unions -- the UGT and CCOO -- reacted immediately, calling for a day of protests across Spain on July 19, saying the new steps hit people on low and average earnings hardest.

And here in the Balearics, the unions want the general public to rise up vent their anger as no one has escaped the affects of the cuts. “Not one of the approved measures implies any effort by businesses and those on highest incomes,” the unions said in a joint statement.
Yesterday protesters already called for “justice” brandishing signs reading: “They are sinking the country.” The austerity package, in particular the value-added tax rise, is expected to brake consumption and deepen the recession.
From the tourism industry to fisheries, car show rooms and consumer associations, there were deep worries about the VAT increase.
Tourism, accounting for about 10 percent of Spanish economic activity, would be among the hardest hit by the new, higher VAT rate of 10 percent on discounted items. “A sledgehammer blow” said Ramon Estalella, secretary general of the hostelry association CEHAT. The secretary general of the hostelry federation FEHR, Emilio Gallego, said industry revenues could be cut by 2.4 billion euros.

Car makers association ANFAC said the VAT impact would cut auto sales by 20'000 to 25'000 cars this year, in a market already in a slump.
Industry after industry has issued new, dire forecasts.
Two consumers' associations, OCU and CEACCOU, calculated that the increase in the general rate of VAT to 21 percent would increase a typical household's expenses by between 415 and 600 euros a year. “One of the engines to get out of this crisis is household consumption and until that is restarted economic activity will not restart either,” they said.


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