Spanish budget for EMU sparks industrial unrest

Date: 21/11/1996

By Pedro Lopez de Pablo

JUST when, for the first time, forecasts put the Spanish economy on the doorstep of European monetary union, the government of José María Aznar is facing its first social challenge.

This weekend, civil servants will go on the march in Madrid to oppose the economic measures the government has taken to fulfil the Maastricht Treaty requirements and enable Spain to qualify for entry into the single currency zone.

Public workers have been the hardest hit by Aznar's budget cuts and now face another year of frozen salaries because of the government's efforts to reduce public spending.

But they are not alone in their anger. Students have taken to the streets to protest at the shortage of public funds for education and coalminers in Asturias y León in northern Spain have blocked roads to remonstrate against the imminent liberalisation of the electricity sector.

If electricity companies are privatised, they will no longer be subject to the current rule which requires state firms to buy a quota of Spanish coal - the only thing keeping most of Spain's coalmines open today.

For now, the government appears unruffled. Protests are isolated and sectorial, and there is not yet a climate of impending general strikes or war with the trade unions. Ministers believe that unions and other movements do not have enough support to pose a real threat, and there is no real political opposition to Aznar's plans either. All Spain's political parties, except the United Left (Izquierda Unida), support the goal of getting Spain into the first group of countries to qualify for EMU on 1 January 1999.

The premier feels that a mass mobilisation of civil servants alone cannot undermine this consensus. Nor can the opinion polls which say that if elections were held today, he would lose.

A senior official in Aznar's Partido Popular said recently that when elections were held four years from now, the people would see that the government had acted in their interests.

But industrial action is looming. Antonio Gutierrez, secretary-general of the Comisiones Obreras (Workers' Commission), has threatened a general strike in December if the government persists in freezing public-sector salaries and refuses to negotiate a deal.

Next week's demonstration will give an indication as to whether the unions are capable of turning that threat into reality.

Since winning the elections in March, Aznar has shown talent for negotiating with the unions and has not hesitated to sign agreements with them even before getting approval from employers, which is a curious stance for a centre-right leader.

But the unions' desire to put on a display of strength after five years of weakness could complicate matters, and they could also find more muscle to oppose the rumoured labour reform plans.