STAFF REPORTER PALMA

A host of local social organisations, led by regional union leaders, are going to march through Palma this evening in protest against the government's social and pension reforms.

Today's demonstration will be at 7pm in Plaza España and wind its way down to Plaza de los Patines while a second march, which is expected to be even bigger, is going to be held on Saturday from s'Escorxador, where the Renoir Cinema complex is, to Plaza España.

The protests are going to come either side of the government's final decisions over pension reforms.
The cabinet is expected to approve a pension reforms bill tomorrow in another step to show investors the government is serious about structural change to revive its fragile economy and avoid a bailout.

The centre-left government is under pressure to reform pensions to persuade international markets it can cut its deficit, and to make its labour market more flexible to reduce 20 percent unemployment, the highest in the euro zone.

The reforms, which raise the retirement age to 67 from 65, will not have any fiscal impact before 2015 but are seen as key for Spain to improve its image on markets as greater life expectancy and high unemployment threaten the system.

The Socialist government's proposals enjoy broad cross-party backing but so far lack support from the unions, which have threatened a general strike after weeks of failed negotiations with various members of the government.

The main hurdle to an agreement is the unions' opposition to the proposed retirement age, which would be one of the highest in Europe. The government has signalled the age could be made flexible for people who have worked for 40 years.

Prime Minister Jose Luis Rodriguez Zapatero will be keen to avoid any social disruption before local elections in May, but strike threats are not considered serious after a general strike on September 29 had limited impact.