Media: Spain's strikes - sideshow in the streets
EUROCRATS putting the finishing touches to euro-governance rules in Brussels today could probably do without the distraction of up to 100,000 trade unionists marching up the Rue de la Loi to protest against austerity measures. But the Spanish government appears to have a rather more relaxed attitute to the first general strike to hit the country in eight years. “I respect the strike,” said José Luis Rodríguez Zapatero, the Socialist prime minister whose austerity measures the unions were protesting against. “I will not be the one who criticises the unions.”
Mr Zapatero sweetened the pill a few days earlier by announcing a tax increase for the rich in 2011. In the event his cherished unions are performing more out of duty than rage. But both the protest and the tax hike are reminders of the underlying problem. As Spain attempts to distance itself from more troubled euro-zone countries like Portugal and Ireland, it must rein in a budget deficit that last year stood at 11.2% of GDP.
The proposed tax increase, aimed at Spaniards earning over €120,000, will do little to help that. Only 200,000-odd people will be caught, and many of them will simply find ways to avoid the tax. Mr Zapatero does not dare raise taxes lower down the earnings scale for fear of shedding further support for his beleaguered Socialist party. This is why all the talk from Madrid is of austerity. The proposed 2011 budget, unveiled last week, aims to slash state spending by a further 3%, partly by freezing civil-service pay and some pensions. The goal is to reduce the deficit to 6% of GDP.
Yet Spain’s fiscal devolution means taxes are nonetheless being raised across much of the country. Struggling regional governments and town halls, which account for half of public spending, are demanding more from taxpayers. The bursting of Spain’s construction bubble has devastated town-hall revenues. Reduced government funding and a drastic fall in construction taxes and land sales have cut income by an average 15%. Juan Bravo, Madrid’s finance chief, predicts the city’s income will not return to 2007 levels until 2016.
Mr Zapatero’s minority government will get its budget through parliament thanks to support from the Basque Nationalist Party, which is being repaid with devolved employment and training powers for the Basque regional government. But there is more work to be done. The government has revised its unemployment estimate for 2011 up to a painful 19.3%, and its projected growth forecast of 1.3% looks optimistic. Markets will be convinced by Mr Zapatero’s belated conversion to reform only if he hits his deficit targets. More cuts, or higher taxes, may yet be needed. Strikes look like the least of Mr Zapatero’s worries.
Postagens
Nenhum comentário:
Postar um comentário