Spain - On Strike

29S - signifying September 29th, the day of the general strike in Spain. Union members are protesting against the recent labour-law changes which they say favour the employer, not the employee. The popularity of the Spanish Prime Minister Zapatero has taken a big hit over this particular issue as he had previously vowed not to mess with employment laws without the approval of the unions. However, when the unions stood in the way of ANY change, Zapatero decided to implement them without their approval - hence the general strike today.

Union representatives say that Spanish workers are already under-remunerated compared to their equivalents elsewhere in Europe. They say that many Spanish workers are on temporary contracts with reduced entitlements when they should be on permanent contracts and greater benefits. Employers say that they use temporary contracts to skirt-around the high cost of hiring and firing workers on permanent contracts. They say that they'd employ more people 'by the book' if they could afford to, and if they weren't stuck with the cost of employees when the fortunes of the company change.

Such a stalemate is one of the reasons that Spain's unemployment rate of 20% is almost double that of France, Germany or the UK. It's also a reflection of how much of the Spanish workforce was employed in the construction industry - an industry which is still some way from recovering.

Many feel that Mr Zapatero took the only course of action that made any sense - he made employment-law changes which are absolutely necessary. Maintaining business as normal would surely have guaranteed more of the same results and effects and, more importantly, hamstrung the country's target of reducing debt.  Finally, Spain is emerging from recession and has bought itself a little economic room for manoeuvre. It has even managed to raise finance at much more reasonable rates of interest on the international markets.

Only recently has Mr Zapatero been emboldened to act decisively and drastically - mainly because the country was starting to look like Greece. Now it looks like Spain will escape the fate of Greece if the momentum of cost cutting and revenue growth made possible by Zapatero's policies can continue.