Austerity anger grows in Europe

Spanish civil servants are taking part in a one-day strike to protest wage cuts aimed at reducing the country's huge deficit. (Manu Fernandez, AP Photo)
Spanish civil servants are taking part in a one-day strike to protest wage cuts aimed at reducing the country's huge deficit. (Manu Fernandez, AP Photo)
Manu Fernandez

Madrid - Tens of thousands of public workers went on strike in Spain and powerful German unions warned of street protests Tuesday amid growing anger over huge austerity cuts by debt-stricken governments.

Tensions also mounted between European Union governments over how to slash spending with Britain rejecting an EU plan for all national budgets to be seen by other nations before they are passed.

Garbage was left uncollected and high-speed trains delayed in Spain as tens of thousands of civil servants stopped work to protest spending cuts by the socialist government.

Prime Minister Jose Luis Rodriguez Zapatero, who is traditionally close to unions, has ordered an average pay cut this year of 5% for public sector salaries and a pay freeze next year.

Unions said roughly 75% of the 2.6 million public workers heeded the strike call but the government put the participation level at just 11%.

Spain has ordered €65bn of spending cuts in a bid to slash the public deficit to the EU limit of 3% of gross domestic product by 2013 from 11.2% last year.

Hundreds of people staged a rally outside of the economy ministry in Madrid chanting "Zapatero resign!" The two largest unions, the CCOO and the UGT, have threatened a general strike by all workers if the government imposes labour reforms.

Rich live beyond means

In Germany, industry, trade unions and the media criticised Chancellor Angela Merkel over the Angela Merkel €86bn of budget cuts she ordered between 2011 and 2014.

"It is not the poor who have lived beyond their means - it is the rich who have," said the head the German Federation of Trade Unions, Michael Sommer.

He said labour would band together with other affected groups in street protests. "And that will really hurt the government."

The leader of the Paritaetische association of charities, Ulrich Schneider, slammed the cuts as "indecent".

Even big business joined the assault, with German banks and the airline industry slamming a tax on financial transactions from 2012 and a levy on flights.

"These are serious times, these are difficult times. We cannot afford everything we would like if we hope to plan for the future and that is why the budget has been laid out like this for the coming years," Merkel told reporters as she announced the cuts on Monday.

European finance ministers on Monday agreed a new $525bn fund for debt stricken nations and EU president Herman Van Rompuy said they also agreed a right to oversee national budgets but Britain rejected any move to let Brussels see the national budget before parliament.

Fall into line

"The budget will be presented to parliament first," British Financial Secretary to the Treasury, Mark Hoban, insisted in a statement as EU finance ministers held the second day of a meeting in Luxembourg.

France had demanded that Britain fall into line with other EU nations.

However Fitch Ratings warned Britain that it needs to put its public finances in order much quicker as it faces a "formidable" fiscal challenge.

Britain's finances need "a strong medium term consolidation strategy - including a faster pace of deficit reduction than set out" in April by the previous Labour government, the international ratings agency said.

Britain's top AAA rating "is supported by its strong policy institutions, advanced, diversified and flexible economy, exceptional financing flexibility and historical track record of fiscal consolidation.

"However, the rise in public debt ratios since 2008 is faster than any other AAA rated sovereign and the... adjustment required to stabilise debt is amongst the highest of advanced countries," Fitch noted in a statement.

The new British government is also planning major cuts.

Prime Minister David Cameron said on Monday that Britain's finances were "even worse than we thought" as he warned of "painful" cuts to tackle the record deficit he estimated at €930bn.

The IMF warned in a new report that "fiscally unsustainable policies" had to end in many eurozone countries.

"Policies need to move urgently from crisis management to fundamental reforms," the Fund said.

We live in a world where facts and fiction get blurred
In times of uncertainty you need journalism you can trust. For 14 free days, you can have access to a world of in-depth analyses, investigative journalism, top opinions and a range of features. Journalism strengthens democracy. Invest in the future today. Thereafter you will be billed R75 per month. You can cancel anytime and if you cancel within 14 days you won't be billed. 
Subscribe to News24
Show Comments ()
Rand - Dollar
Rand - Pound
Rand - Euro
Rand - Aus dollar
Rand - Yen
Brent Crude
Top 40
All Share
Resource 10
Industrial 25
Financial 15
All JSE data delayed by at least 15 minutes Iress logo
Company Snapshot
Editorial feedback and complaints

Contact the public editor with feedback for our journalists, complaints, queries or suggestions about articles on News24.

Government tenders

Find public sector tender opportunities in South Africa here.

Government tenders
This portal provides access to information on all tenders made by all public sector organisations in all spheres of government.
Browse tenders