Spain witnessed violent clashes between police and protesters outside Parliament in Madrid following the announcement of more economic reforms on the heels of depressing unemployment figures.
Twenty-seven per cent or 6.2 million of the country’s 39 million is unemployed. Youth unemployment has reached gigantic proportions with 57 per cent of Spain’s young people out of work. Surprisingly, the government’s austerity programme has hit the private sector hardest with most redundancies recorded there. Spain’s bureaucracy, on the other hand, actually grew these past two years.
Some 1,000 activists had gathered in front of the Lower House of Parliament in Madrid earlier this week, within hours of the release of official unemployment figures. Police responded with baton charges after some attempted to pull down a barricade and some threw bottles and firecrackers. Prime Minister Mariano Rajoy said he would be unveiling economic reforms aimed at stimulating growth. But the government will not reverse any of the budget cuts or austerity measures that are driving the protests. “The plan will be a specific, comprehensive and credible set of structural reforms rather than spending cuts for the sake of spending cuts,” a government spokesperson told reporters.
But citizens have become increasingly wary of such declarations since experience shows that budget cuts have always been accompanied by a slump in growth and a rise in joblessness.
The “Siege of Parliament” protest was organised by the political online platform ¡En Pie! (Stand Up!), an amalgam of political groups calling for the resignations of lawmakers; the dissolution of both Upper and Lower Houses of Parliament; and a new political process.
Similar bad news emerged from France where unemployment, at 3.2 million, reached its highest since 1977. However, the French situation is a lot easier compared to Spain, which has twice the number of unemployed with about 60 per cent of the French population. The French government has repeatedly said that though it is introducing budget cuts to reduce its huge public debt, it is “not on the path of austerity”, to quote Prime Minister Jean-Marc Ayrault.
This grim data has generated debate over whether austerity is the best medicine for what ails Europe.
The International Monetary Fund (IMF) and the European Central Bank (ECB), which is strongly influenced by German hardliners who favour austerity, appear to be on a collision course. The IMF is calling for a relaxation in austerity drives — for both the eurozone and Britain — but Germany and the ECB are opposed. Spain posted Europe’s worst budget deficit last year and, though part of that was a one-off €41 billion payment to rescue the country’s banks, it will still struggle to meet the deficit targets set by Brussels without pushing even more people into unemployment. Real income has fallen sharply and households are struggling to meet monthly bills. The number of Spaniards queuing up at soup kitchens has soared.
In France, President Francois Hollande reaffirmed his goal to reverse spiralling unemployment calling on his government to combine with industry and other players to use all means possible to create jobs. Carmakers headed a list of businesses laying off workers. PSA Peugeot Citroen is scrapping more than 10,000 domestic jobs and rival Renault aims to cut 7,500 posts in France by 2016.
(With agency inputs)