Pat Dollard

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New York Times:

MADRID — Spanish public workers went on strike on Tuesday against a cut in their wages in what could be the first of several union-led protests against the government’s latest austerity measures.

The strike reduced hospital care, mail distribution and other public services to a minimum, but did not cause a nationwide paralysis. Trade unions said that 75 percent of the country’s 2.5 million public workers had gone on strike — a number that was contested by the government, which put the level of participation at about 11.85 percent.

Consuelo Rumi, deputy minister in charge of the civil service, described the protest as a day of “normality” with few incidents. “This strike has had a limited reach,” she said.

Reports suggested that some regions were far more affected than others, particularly Catalonia, where the transport network was disrupted and protesters briefly cut off the city’s main thoroughfare by burning tires. The public sector strike came on top of a separate protest by truck drivers angered by the cost of diesel fuel, which has notably hit traffic at the border with France.

Spain’s public workers were protesting against a 5 percent average reduction in their wages this year, part of a government package of additional spending cuts worth 15 billion euros that was narrowly approved by lawmakers last month.

The cuts are designed to help appease international investors — concerned about Spain and other ailing economies among the 16 members of the euro — by cutting Spain’s deficit from 11.2 percent of gross domestic product in 2009 to 3 percent in 2013, the limit under the euro rules.

Tuesday’s strike, however, is widely expected to be the prelude to more severe labor unrest later this month, after the government unveils on June 16 plans to overhaul Spain’s labor laws. The country’s two main unions, which have been at loggerheads with employers over how to improve the labor market, have warned of a general strike should the government present a “hurtful” reform plan.

Spain has some of the highest firing costs for open-ended contracts in Europe, according to the World Bank. That, in turn, has encouraged employers to put a quarter of the country’s workforce on temporary contracts. That contributes to rapid fluctuations in Spain’s employment levels, with the jobless rate recently soaring to almost 20 percent, double the European Union’s average.

As part of his labor reform, José Luis Rodríguez Zapatero, the prime minister, is expected to propose next week a sharp cut in redundancy costs for companies, reducing the payment that fired workers on long-term contracts are guaranteed for each year of employment to as little as 20 days from the prevailing 45 days.

A second priority of the reform is to loosen the rigid system of collective bargaining that prevents companies from agreeing to their own terms with employees — and even forces them to follow different rules in different regions.

Still, the government is also expected to take additional steps — focusing this time on increasing state revenues — to help reduce the deficit amid concerns about Spain’s growth prospects. BBVA, one of Spain’s two biggest banks, forecast Monday that Spain’s economy would contract 0.6 percent this year.

Mr. Zapatero recently warned the rich of higher taxes. The government is also considering a fiscal amnesty, according to the center-right newspaper El Mundo, that would seek to repatriate about 50 billion euros held offshore by granting tax evaders a pardon in return for investing in Spanish debt at below market rates.