* Unions to protest against pension reform
* Opposition threatens no confidence vote, unlikely to win
* Spanish assets pressured: bond spreads widen, stocks dive
By Jason Webb
MADRID, Feb 4 Spanish unions said on Thursday
they plan protests and the opposition may hold a vote of no
confidence as criticism mounted of Prime Minister Jose Luis
Rodriguez Zapatero's efforts to overhaul state finances.
Doubts about Spain's deficit pushed Spanish bond prices down
and sent stocks .IBEX tumbling nearly 6 percent on a day when
Economy Minister Elena Salgado stressed that the country was not
a risk to the future of the euro and some of the allies Zapatero
needs to enact austerity plans turned away from him.
Debt markets worry that the government will struggle to cut
spending at a time when unemployment is nearing 20 percent.
The largest union confederation, Comisiones Obreras (CCOO),
said it would organise protest marches during the last week of
February against the government's proposal to raise the
retirement age to 67 from 65.
"If Zapatero wants to perform harikiri and not change
course, that's his decision," CCOOleader Ignacio Fernandez Toxo
told a media conference, just a day before the government hopes
to gather union support for proposals to streamline labour
The CCOO has also called the government a "bunch of
amateurs" following a series of public relations blunders
related to a 50 billion euro austerity plan. [ID:nLDE6122Q0]
CRITICISM AMONG SOCIALISTS
Criticism has even arisen within the Socialist Party, with
the head of the regional government of Castilla-La Mancha
calling for Zapatero to make changes to his cabinet.
Meanwhile, the deputy leader of the conservative opposition
Popular Party also raised the heat on Zapatero by saying that it
could seek a vote of no confidence in parliament, which, if
successful, would topple the government.
Although Maria Dolores de Cospedal admitted the Popular
Party currently lacked the votes in parliament for such a move,
her remarks augured ill for hopes of broad-based support for
government crisis plans in the legislature.
The Popular Party's opinion poll lead over the Socialists
widened to 3.8 percentage points in January, up slightly from
November, according to the Centro de Investigaciones
Sociologicas. National elections are not due until 2012.
Polling figures were not the only grim reading for the
The spread of Spanish 10-year government bonds ES10YT=RR
over benchmark German bunds rose to around 95 basis points on
Thursday, amid a general retreat from riskier assets in global
markets, up from the mid-80s the day before.
The economy minister denied Spain was a risk to the euro and
criticised foreign analysts such as Nobel Prize-winning
economist Paul Krugman, who this week said Spain was the euro
zone's "biggest trouble spot", and foreign media for being too
harsh on Spain.
"Maybe there is a lack of comprehension about what the euro
means for our economies," Salgado said on Spanish radio.
The government says it will cut spending by 50 billion euros
as it tries to reduce a budget deficit of 11.4 percent of gross
domestic product in 2009 to the EU limit of 3 percent by 2013.
"The current fundamentals of the Spanish economy only make
good reading if one is into horror stories," wrote 4Cast analyst
Jose Garcia Zarate, adding that Spain, more than Portugal or
even Greece, was increasingly being singled out as the "make or
break test for the Eurozone", due to the size of its economy.
(Additional reporting by Feliciano Tisera; Editing by Louise