The Spanish prime minister has unveiled major spending cuts to try to rein in the country’s massive debt and prevent Spain repeating the Greek crisis on a much bigger scale.
The measures announced to parliament by Jose Luis Rodriguez Zapatero include lower pay for public workers and layoffs as well as cuts in public sector investment spending.
Zapatero said: “I am aware that many Spaniards will find it hard to understand why now, when the government is announcing an economic recovery and first quarter figures show we are coming out of the crisis, that we are asking them for more sacrifice, greater effort and more commitment. The situation is difficult and it would be foolish to try to hide that. But I can assure you that the government won’t give up, we are convinced that we will manage to go forward, we will return to economic recovery, stability and job creation.”
The further austerity measures brought an angry reaction from Spanish trade unions.
Fernandez Toxo, leader of Spain’s biggest union confederation, Comisiones Obreras, said he would not rule out protest action.
But the leader of the second-largest labour grouping, Candido Mendez of the Union General de Trabajadores, sounded a more conciliatory note, saying that he still thought it possible unions might agree to labour market reforms.
Zapatero has been under pressure from Brussels, the International Monetary Fund and even US President Barack Obama to make faster cuts.
The leader of the conservative Popular Party opposition, Mariano Rajoy, accused Zapatero of allowing government finances to deteriorate to the point that Spain had to be pushed to act by the European Union, reducing the country to a “protectorate” of Brussels.