UPDATE 4-Angry Spaniards strike against labour reform
* Unions say 77 percent turnout, govt says impact limited
* Government vows to push forward with reforms
* Hundreds of thousands join protests across Spain
* Pockets of violence flare in Barcelona
By Carlos Ruano and Tracy Rucinski
BARCELONA/MADRID, March 29 (Reuters) - Spanish workers angry at a labour reform the government calls an "unstoppable" necessity staged a general strike on Thursday, bringing factories and ports to a standstill and igniting flashes of violence on the streets.
Hundreds of thousands attended largely peaceful marches throughout Spain, waving red flags and beating drums against the budget cuts of Prime Minister Mariano Rajoy, who was elected by a landslide only four months ago on a mandate to dig the country out of a debt crisis that has unnerved its European neighbours.
Police fired rubber bullets to disperse crowds in downtown Barcelona after hooded youths threw rocks at windows and set rubbish bins alight in Spain's second city, where - as in much of Spain - unemployment has been devastating among the young.
In Madrid, demonstrators chanted slogans and carried banners protesting against the conservative government's measures, which will make it cheaper for companies to fire workers and will dismantle a nationwide system of collective pay bargaining.
"We're here because we are really angry," said Alba Valle, a 23-year-old media technician in the capital who, like almost one young Spaniard in two, cannot find work.
"It's a step backwards for the country."
Though organisers said millions attended evening marches in 110 cities local media estimates, in the absence of data from authorities, put the crowds in only the hundreds of thousands.
Some observers see a degree of resignation about the prospects of avoiding new austerity goals dictated by concerns in the European Union that Spain risks going bust.
At the same time, however, the country is tipping into its second recession since the end of 2009 and some observers expect at least another million people to join already swollen unemployment lines, straining the budget. The jobless rate is already 23 percent, the highest in the 27-member EU bloc.
Spaniards have so far been largely tolerant of Rajoy's efforts to reform labour law, much of which dates back to times when levels of employment were substantially higher. His aim is to meet strict EU-imposed targets for the government budget deficit to ensure Madrid avoids a Greek-style debt crisis.
But the general strike, the first in 18 months, showed that patience may be wearing thin. The largest union put support among its members for the strike at 77 percent. The government said the work day went normally but gave no overall tally.
"We don't have much hope, but this is just the beginning," said Trini Cuesta, a 58-year-old employee at a public hospital in Barcelona. "It's not just about labour reform, we're against policies that are provoking social and economic ruin," she said.
"Social protests must increase."
Police made a total of 176 arrests and there were 104 injuries, the Interior Ministry said, saying the day had been calm and the strike had limited impact.
It halted production at factories from Barcelona in the northeast to Cadiz in the southwest. Unions reported full stoppages at General Motors Espana, Renault, ArcelorMittal and Acerinox. Urban transport networks were mostly cut to skeleton services.
Rajoy's government said it was committed to making reforms that it argues will help to reduce unemployment by making the labour market more efficient. "The agenda for reform is unstoppable," Labour Minister Fatima Banez said on Thursday.
The police presence was heavy around parliament, where politicians put in a longer work day than usual as Rajoy sought approval for five different measures, including funding for indebted local governments to pay their suppliers.
Union members gathered in major cities where some plastered stickers on shop windows reading "Closed for Strike" - but in fact many of the stores remained open for business.
Tourists were locked out of the Alhambra, the 14th-century Moorish palace in the southern city of Granada that is one of Europe's great cultural monuments and a popular attraction.
Many workers crossed picket lines, saying they feared losing their jobs or losing the average of around 100 euros ($130) to be docked from the pay cheques of strikers.
While Spaniards fortunate to have jobs on traditional contracts are fighting to preserve their benefit, many others, especially the young, can find only short-term contracts of typically six months duration which offer little job security.
Many such workers fear employers might punish them if they go on strike and not renew contracts when they expire - an army of unemployed is waiting at the gate for any job going.
Similar labour reforms, for similar reasons, are being battled over elsewhere in Europe, notably in Italy, where Prime Minister Mario Monti, a technocrat appointed to avert a debt crisis in Rome, has also run into heavy opposition this month.
LONG YEAR OF DEMONSTRATIONS?
Fewer than a fifth of Spanish employees are currently affiliated with the country's two biggest unions and many feel these organisations do not represent the wider workforce.
"A lot of people actually blame the unions in part for the rigidity in the labour market and lack of competitiveness, so they aren't exactly in the position to rally a lot of people and the support for the strike reflects that," said David Bach, political analyst at IE business school in Madrid.
However, union members are ready for a long fight. "This is the largest cut in rights since anyone can remember. There has to be a better way to get out of this crisis," UGT union employee Marta Lois, 40, said on Madrid's Gran Via, a central avenue where protesters blocked traffic early in the day.
"Don't forget this is just the first major event of what is likely going to be a long year of demonstrations against government policies," Antonio Barroso, political analyst with the consultancy Eurasia Group said.
Rajoy said on Tuesday his administration would pass a "very, very, austere budget" on Friday. His goal of cutting the deficit this year to 5.3 percent of gross domestic product implies nominal cuts of at least 35 billion euros ($46.63 billion).
The cuts are meant to keep borrowing costs down as well as working towards meeting the EU's 3 percent budget deficit limit next year. But some economists say they will deepen the looming recession, potentially having the very opposite effect.
Despite the promises to push on with reforms aimed at winning approval from Brussels, Rajoy's People's Party suffered a surprise setback in a regional election on Sunday, meaning he must measure his steps to avoid provoking wider discontent.
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