As austerity bites hard, a once pliant Spain revolts

After four days of daily protests, some violently dispersed, Spain is bracing for a cycle of social unrest against the harshest austerity measures in decades. At stake is not only Spain’s economic recovery, but that of the European Union.

Prime Minister Mariano Rajoy, of the conservative Popular Party, pled yesterday for calm and sacrifice after hundreds of thousands marched against his labor reform on Feb. 19. He insisted he has no intention of backtracking on steep budget cuts that have only begun to be introduced. Even on the campaign trail, Rajoy warned of pain to come – and his party was still elected.  

But while Spanish and European authorities say budget cuts are necessary, experts warn the Spanish measures could be too much, too fast. A population already on edge could be galvanized to action. Social instability in a country the size of Spain, especially in rejection of European Union-imposed policies, could spread to other countries in the eurozone facing angry publics.

“The government’s legitimacy could soon be questioned on the street," says Jaime Pastor, professor of political science and an expert on mass mobilizations at UNED, a university. “The ghost of Spain turning into the next Greece is still there. If the trend is for Spain to follow that model, the European crisis is going to get worse."

Labor says 'enough'

Spain, with a population of 43 million, has an unemployment rate of 23 percent, by far Europe’s highest – and it’s only expected to increase. Half of youth are jobless. The Central Bank expects a recession of 1.5 percent for 2012.

Desperation is palpable and has become routine in Spanish cities. The 150,000 evictions of families so far in the crisis will more than double in 2012, according to banking consumers' association ADICAE, and there are more 1.5 million families without any wage earners, a number that will surge this year.

The changes in labor regulations and other government measures will initially be painful, but are meant to spur job creation and economic growth. By making layoffs cheaper and quicker and expediting salary cuts, they government says they will increase the competitiveness of the Spanish economy and foster job creation.

“The labor reform will generate significant conflict,” says Eduardo Rojo, a labor law professor in the Universidad Autónoma de Barcelona. “Good labor relations are good for public cohesion, and this reform tilts the balance between bosses and employees. I understand why the labor movement would be angry.”

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