Anti-austerity strikes roil Europe, but many see cutbacks as inevitable

Spaniards on Wednesday largely shunned the country’s first general strike this decade against the government’s austerity measures, despite coping with Europe’s worst unemployment rates and one of the deepest and longest recessions.

The 24-hour stoppage – called to protest labor and pension reforms as well as deep cuts in government spending to reduce a ballooning public deficit – appeared to be confined to large industries, some public services, and the transit sector.

But most private businesses were open, and many of the employees who showed up for work appeared split in their view of the austerity reforms, in a sign that while Spaniards don't like the idea of cutting social benefits, many are accepting it as inevitable.

Spain is not the only country facing public frustration over austerity measures. France has had several strikes this year, as has Greece. On Wednesday, tens of thousands marched in a dozen European capitals to protest reforms throughout the Continent. In Brussels, police said some 56,000 had marched.

Unions pledge to press on

Many employee unions have pledged that Wednesday's strikes were only the beginning of their resistance to the changes, but European Union Commission President José Manual Barroso said there was little option to the austerity measures, despite the “social knock-on effect.”

“A strike now doesn’t make any sense to me,” said Esperanza Sanz, a saleswoman working in the high-end women's apparel section of El Corte Ingles, the country’s biggest department store. Riot police protected the entrances, while protesters chanted slogans a few feet away in Madrid’s main square, Puerta del Sol.

Ms. Sanz joined in all previous general strikes, including the last one in 2002, but not this time. “Unions should have done this earlier when the government announced the reforms," she declared, "but what good is striking going to do now?”

There was scattered violence, especially in Barcelona, and several minor injuries reported throughout the country. A few dozen people were arrested and released. But a heavy police presence and public indifference appear to have thwarted any real challenge to the government’s unrelenting drive to cut its deficit, which was Europe's third-largest in 2009.

“I think Spanish society understands that it will be hard to overcome this crisis and that more sacrifices will have to be made, and that explains why there is so little enthusiasm for this strike,” says Josep Oliver, an applied economics professor in the Universidad Autónoma de Barcelona that specializes in fiscal policy.

Benefits already cut

The government already cut public wages by 5 percent and raised taxes earlier this year. It has announced more tax increases and plans to reform the pension system and to raise the retirement age to 67 from 65, all with the support of the main political parties. The labor reform approved by the government also makes firing easier and reduces labor costs.

The government won’t replace almost 200,000 public jobs once people retire in the following years, in an effort to repay the public debt that soared amid the recession.

The government tried holding off on reforms, but it buckled under EU pressure, especially as investors and financiers worried that Spain would drag the rest of the Continent to default on its debt.

The Socialist government of Prime Minister José Luis Rodríguez Zapatero, once considered a champion by the country’s unions, has pledged not to allow Spain to default on its debt. The country is now paying around half of the premium to borrow money that it did at the height of market nervousness earlier this year, although it’s still more than many European countries pay.

Indeed, the rating agency Moody’s could downgrade Spain’s credit Thursday when it completes a review of its economy. The government will also spell out details of the 2011 budget proposal, which nearly forced early general elections after none of Mr. Zapatero’s parliamentary allies supported his proposal. The right-leaning Basque nationalist party rescued the embattled prime minister in exchange for more governing autonomy.

Spain faces tough choices

The government attempted to delay fiscal cutbacks but now faces a crucial moment in which reforms are essential, say economic analysts.

“As the crisis deepened, the fiscal stimulus ran out of steam and financial markets started losing faith. But even without the debt pressure, the government had to rectify. It’s the same elsewhere,” says Mr. Oliver.

The unions are demanding the government back down from its austerity measures, but few expect it will.

"That would destroy Spain’s credibility internationally and raise the cost of the debt seriously,” says Florentino Felgueroso, an economist in the Universidad de Oviedo who specializes in employment. “Worse yet, it would make our welfare system unsustainable. This is a sort of long-term social policy, even if it doesn’t appear that way.”

Many strikers insist that they are not against Zapatero or his government, but against the reforms.

"This is going to hurt them politically and I know this will help the right. Maybe the government won’t even make it to the next elections because of our strike, but Zapatero did this to himself," says Regino Martín, a government employee who was waving his union flag. “He will backtrack, you’ll see.”