STRIKE D-DAY

SPAIN´S Socialist government, forced to impose unpopular measures to fix a battered economy, faces a general strike today with unions angry over what they see as a policy U-turn. But many view the government's tough labour reforms and belt-tightening moves as inevitable, and even necessary, and a low turnout is expected.

A poll published Friday in the newspaper Publico said only 18 percent of workers backed the strike, and 71 percent believed it would not force the government of Prime Minister Jose Luis Rodriguez Zapatero to change course. “The aim of the strike is not to force him to resign, but to change his policies ... to drop this new avatar, this reincarnation,“ said Candido Mendez, the head of the UGT union. “The prime minister, in his heart of hearts, is aware that he must change,“ said Ignacio Fernandez Toxo, the head of the other main union, CCOO.
But Labour Minister Celestino Corbacho vowed on Sunday that there would be no reversal of the sweeping overhaul of Spain's rigid labour market which received final approval by parliament on September 9. “It is the law and there is no going back, that must be clear,” he told conservative daily newspaper ABC. “It introduces elements of flexibility that will allow our companies and economy to gain competitiveness and it bets decisively on the creation of more stable work,“ he said.

The labour market reforms cut Spain's high cost of firing workers and give companies more flexibility to reduce working hours and staff levels in economic downturns.

Zapatero, a member of the UGT, maintained a cosy relationship with the two unions after he first took office in 2004.
But that turned sour when he entered his second term in 2008, and the economy slumped into recession as the once-booming property sector collapsed. It only emerged in the first quarter of this year with tepid growth of 0.1 percent.

The recession has sent the country's unemployment rate soaring to more than 20 percent, the highest in the 16-nation eurozone.
The rise in joblessness has in turn jacked up government spending on unemployment benefits, pushing Spain's public deficit to 11.1 percent of gross domestic product last year, the third highest in the eurozone after Greece and Ireland.

The government argues that the labour market reform will help fight the high unemployment levels, following the collapse of a property bubble at the end of 2008. “They have the right to strike but the government has the duty to change things to generate more employment and create opportunities for young people,“ Zapatero told a party rally on Sunday in Zaragoza in eastern Spain.

The government on Friday approved a tough austerity budget for 2011 aimed at reassuring nervous markets over its ability to rein in the massive public deficit.

The proposals, which include new tax hikes for the wealthy, must go to parliament where the government does not hold an absolute majority but is hopeful of ensuring its successful passage. “It is the most austere budget in recent years,” Finance Minister Elena Salgado told a news conference.
It envisages an overall cut in government expenditure of almost eight percent compared to this year.
The government in May passed a 15-billion-euro (19-billion-dollar) austerity plan to shore up public finances amid investor concerns it could follow Greece into a financial crisis.

It included an average state employee salary reduction of five percent and a pensions freeze.
That was on top of a 50-billion-euro package of spending cuts announced in January designed to progressively slash the public deficit to the eurozone limit of three percent of gross domestic product by 2013.

The International Monetary Fund has said labour reforms are “absolutely crucial” if Spain is to cut its jobless rate and rein in its massive public deficit.

But the UGT and CCOO, which together represent around two million workers, slammed the measures as a “backward step” and an about-face by Zapatero, who had vowed to protect social policies despite the economic crisis.

In June they announced a 24-hour general strike for September 29 in protest. They are also angry over the spending cuts and plans to gradually raise the retirement age to 67 from 65.

It will be Spain's first general strike since 2002 and the first since Zapatero took office.