A wide outbreak of anti-austerity strikes swept across cities in Europe, such as Madrid and Lisbon, on Wednesday 14 November, as the result of a growing intolerance against tax rises and spending cuts.
Protesters are angry at painful economic reforms to be implemented, which in Spain involve spending cuts and tax rises of €40bn next year. Tens of thousands of people swarmed the Plaza de Colón square in Madrid, holding banners with the message emblazoned upon them: “They are taking away our future.” Protesters also jammed cash machines with glue and coins as riot police fought to disperse crowds with rubber bullets. The situation was echoed in Lisbon where public transport was beset by problems, as the metro closed and buses and trains ground to a halt in the rest of the country.
Candido Mendez, head of Spain’s second-biggest labour federation, the General Workers’ Union, explained, “We’re on strike to stop these suicidal policies.” Protesters view reforms as excessive and failing to improve the current economic situation, which they feel would be stimulated through policies that promote growth and wider employment opportunities instead.
Angela Merkel, Germany’s chancellor, maintains that fiscal discipline offers the only route out of recession, arguing that establishing “sound budgets” first and foremost is crucial for creating jobs. However, on a recent visit to Lisbon, Merkel’s message of “tough love” may have fallen flat as she was greeted with burning effigies by hostile crowds.
In Portugal the centre-left Socialists, the main opposition party, are demanding that the government renegotiates its most recent rescue package, which would see an increase in income tax by an average of about 30 per cent. This is as the country struggles to deal with a €78bn bailout from the EU and International Monetary Fund, which means in return Portugal must freeze wages, increase sales tax on items such as cars and tobacco and reduce its most generous state pensions.
It is suspected that Spain could be the next country in the eurozone to request an emergency bailout, making it the fourth to do so following Greece, Ireland and Portugal. Economists hope this will not be the case however and that the domino effect will stop following Portugal’s bailout. Depressing figures cast doubt on this assumption though. Spain’s economy, the fourth largest in the euro zone, is expected to shrink by 1.5 percent this year. Unemployment currently stands at 25%, the highest rate in Europe. In October El Pais, Spain’s leading newspaper, announced it would lay off a third of its staff, reducing the salary of those remaining by 15% after reporting hundreds of millions of euros in losses.
Although the austerity strikes gained global press coverage they are unlikely to make sweeping changes, if any at all, to painful reforms aimed at cutting the deficit. This was exemplified when the Spanish Economy Minister, Luis de Guindos, reiterated on Wednesday that the government would stick to the trajectory it had carved out regardless of strikes.