CIARAN GILESMADRID (AP) â¿¿ Spanish labor unions mounted their first significant challenge to the country's new government Friday when they called for a general strike for March 29 to protest against new labor reforms and austerity measures. The labor reforms, passed last month, slash the cost of firing workers and ease conditions under which they can be dismissed. Salaries can be lowered unilaterally, and companies can lay off employees at the cheapest level of severance pay by reporting three straight months of declining revenue. Workers Commissions and the General Workers Union called the stoppage following separate executive committee meetings. Ignacio Fernandez Toxo of Workers Commission said the reforms are steered too much in businesses' favor. He likened the changes to labor laws that existed when Gen. Francisco Franco ruled, from 1939-1975. "It is the most regressive reform in the history of democracy in Spain," he told a news conference. "It is a strike that is fair and necessary," added UGT colleague Candido Mendez. Deputy Prime Minister Soraya Saenz de Santamaria said a general strike was not the remedy for a country with more than 5 million people out of work. "It's not the solution," said Saenz de Santamaria after a weekly Cabinet meeting. "In moments of grave difficulties for all Spaniards the government values more constructive efforts that help improve the country." Unions have also called midday rallies across Spain this Sunday to protest the reforms. A milder labor reform and austerity measures by the former Socialist government triggered a general strike Sept. 29 of 2010, although that stoppage was only partially successful. Before he approved the reform, Prime Minister Mariano Rajoy was overheard telling European Union colleagues in Brussels that the measures would mean a general strike The latest labor market overhaul is aimed at rebooting an ailing economy suffering a eurozone-high unemployment rate of near 23 percent.
Rajoy has acknowledged that the rate will probably go over 24 percent this year despite the reform, and says that when the economic cycle eventually changes, Spain will be in a better position to create jobs.But unions argue that such labor reforms are not the answer and point out that since the last reform more than a million people have joined the ranks of the unemployed. They call instead for fiscal and financial reforms to create jobs and combat fraud. Spain's economy went into a tailspin in 2008 with the collapse of a real estate bubble that had fueled the economy for a decade making it once the EU's top job creator. The economy is expected to enter its second recession in three years this quarter. One of the country's chief tasks has been to convince investors that it will not need a bailout like Greece, Ireland and Portugal. To do this it has embarked on a race to bring a swollen government deficit of 11.2 percent of gross domestic product in 2009 back down to the EU limit 3 percent by 2013. But the 2011 deficit reached 8.5 percent last year, way above the 6 percent promised by the Socialist government. In consequence, Rajoy has dismissed an agreed deficit goal of 4.4 percent for 2012 and said it will be 5.8 percent, risking EU sanctions. Unions are also angry over a â¿¬13 billion ($17 billion) deficit reduction package approved in December which brought in higher income and property taxes and spending cutbacks. Socialist-ordered cuts in civil servant wages were retained. In addition, regional governments are suffering the brunt of the cutbacks have begun making inroads into education, health care and other social services.