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Thousands protest austerity measures in Spain

Madrid – In Spain on Thursday, yields on the country’s five-year bond reached a 16-year record high as the Conservative government tried to convince investors and European finance ministers that Spain can properly handle its budgetary crisis. The news came as tens of thousands of protestors took the streets in some 80 cities across the country, angry at the country’s recent austerity measures.

Puerta del Sol is a popular Madrid plaza, filled with shops, cafes and, on Thursday, thousands of demonstrators from all across the capital region. A march that began less than one kilometer away ended steps away from the Spanish Congress. (Police barricaded  Carrera de San Jeronimo, the street that runs right in front of the Congress and leads up to Puerta del Sol.) For the past several days, legislators have been signing into law a series of reforms aimed at reducing the country’s budget deficit from the current 8.9 percent to below three percent by 2014, putting it in line with EU regulations.

Spanish demonstrators offer doomsday predictions as government pushes through austerity reforms, Madrid, July 19, 2012 (photo: Roee Ruttenberg)

Spanish demonstrators offer doomsday predictions as government pushes through austerity reforms, Madrid, July 19, 2012 (photo: Roee Ruttenberg)

Mariano Rajoy, the Conservative prime minister, is doing everything he can to ensure that Spain does not fall prey to an all-out Greece-style bailout.

At the square where the march ended, union leaders who were among the organizers of the mass demonstrations gave speeches stating their opposition to Rajoy’s measures, which have included a series of tax hikes and budget cuts.  Nuria Alberto is one of the rally co-organizers:

We are indignant. All of Spain has taken to the streets, in all its colors. We are protesting because of this situation which is becoming unsustainable and bringing the country to ruin.

Rajoy’s finance minister, Cristobal Montoro, testified on Wednesday and Thursday before the House of Deputies (the lower congressional chamber), stating that Spain has no choice but to push through the government’s austerity plans, and he insisted public sectors workers know that there is no money in the state coffers to pay them.

Ironcally, Rajoy’s government was brought into office some seven months ago, ousting the previous Socialist government of Jose Luis Zapatero. In his bid to get elected, Rajoy insisted there would not be an increase in taxes under his leadership. But that clearly has not been the case. Even from day one, when Rajoy began trying to balance Spain’s books, he increased income taxes. Now come Rajoy’s latest measures.

Rajoy knows he has to slash 65 billions euros from the government’s budget. He and his cabinet have gone through public expenditures like an a la carte menu and started trimming, introducing the harshest reforms Spain has seen in its thirty years of democratic rule.  They include what appear to be a number of attacks on supporters of opposition political parties, the working class, and the unions that represent them. Those measures included, for example, a reduction in the number of annual days of leave that public sector workers enjoy, a reduction in some twenty percent in funding for unions and political parties.  But perhaps the harshest reduction being felt by the working class here is three percent increase in the VAT, from 18 percent to 21 percent (effectively a tax on purchases goods and services), and the elimination of their so-called “Christmas bonuses” (which effectively amounts to a 7.1% pay cut).

For the first time, policemen and firemen were among the civil servants who took part en masse in the demonstrations. Antonio, a fireman, say he does not mind taking a cut in his salary to help the poor, but not to help the politicians. He notes that Spain has twice as many politicians as Germany, a country with twice the population. Indeed, much of Spain’s public “fat” lies in its complicated and obese system staggered governance, spread-out over 17 regions and numerous towns. Even at the national level, Spain’s Senate, the upper house, has 230 seats, more than twice the United States, a country with a population that is six times larger. Essentially, people like Antonio, the fireman, say Spain needs less public sector workers at the top, not at bottom.

The government denies that it is disproportionately targeting the the country’s most vulnerable.  Arturo Fernandez, the president of Madrid’s regional business association, said companies and corporations are also paying a price, but that they are the ones that will save Spain.

Here there is no alternative but to tighten our belt. We have nothing else we can do.  We, the businessmen, understand this. But the people don’t, and they express it by going out on the streets and demonstrating.

It is worth noting that the Royal Family, dealing with its own public relations crisis, announced that its salary would also be cut by the same amount in solidarity with the people. But it might be of little comfort to Spanish citizens who are now scrambling to figure out how to buy Christmas gifts for their children this winter without the bonuses they had gotten so used to.


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    1. XYZ

      Why should the Spaniards, the Greeks, the Irish and all the rest of the EURO-gang cut their standard of living when they can keep borrowing money that someone else’s children will have to pay back in the future?

      Reply to Comment