Brussels oversees Spain's deficit cuts (4)

08:54, May 17, 2010      

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The Government's budget plan did not have the same warm reception among the Popular Party (PP) on the opposition benches. Its conservative leader, Mariano Rajoy, accused Zapatero of "improvisation" and of perpetrating "the largest social cuts in the history of Spanish democracy".

In turn, the two major Spanish trade unions, Union General de Trabajadores (UGT) and Comisiones Obreras (CCOO), announced demonstrations and did not rule out a general strike. After a meeting in the president's residence, Moncloa Palace, UGT secretary general Candido Mendez declared that "Zapatero’s clarifications have cemented our opposition and rejection".

The last general strike in Spain took place on June 20, 2002 in protest against reforms to the unemployment benefit scheme carried out by Jose Maria Aznar’s PP Government. For the moment, UGT and CCOO, together with the civil servants' trade union CSI-CSIF, have announced a public sector strike for June 2.

These events confirmed the growing distance between government and trade unions before the looming and controversial reform in the labour market, which may include cheaper contract and lay-off costs. Many economists see this structural reform as unavoidable to combat Spain's poor competitiveness and massive unemployment rate, which affects 4.6 million people, 20 percent of the labour force.

Businesses will be the third negotiating party in the reform. President of the Spanish Employer's Organization (CEOE) Gerardo Diaz Ferran described the adjustment plan as "positive" and added, referring to the trade unions, that "the country does not need strikes right now".

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