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May Day puts austerity in focus

Wednesday, May 02, 2012 - 02:58

May 1 - As demonstrators in major cities have marked May Day, is Europe rapidly losing its appetite for austerity? Andrew Potter reports.

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May Day in Madrid. The annual occasion to defend workers rights has never been more keenly felt. The Spanish government is one of many in Europe to introduce austerity programmes to try and dig a struggling economy out of crippling debt. But in the face of record unemployment these protesters say they've had enough of the bitter economic medicine. (SOUNDBITE) (Spanish) UGT MEMBER EUGENIO, SAYING: "Let's see if we can convince the government that austerity cannot give us any good." (SOUNDBITE) (Spanish) 74-YEAR-OLD PROTESTER SAGRARIO, SAYING: "We are losing what we have been fighting for over the past fifty years, during the years of the struggle of the working class." Spain wants to trim 27 billion euros from its budget this year, with a further 10 billion euros to cut from healthcare and education spending. When euro zone countries need bailing out, Germany has paid the lion's share. That's why it's heaping pressure on its European neighbours to sort out their finances. And on the eve of May Day German finance minister Wolfgang Schaeble was in town, gently reminding Spain of its obligations. (SOUNDBITE) (German) GERMAN FINANCE MINISTER, WOLGANG SCHAEUBLE, SAYING: "The measures Spain's government has undertaken, in the opinion of the German government, are very impressive measures. They correspond to what we agreed upon jointly and in accordance with the rules of the European Union secondary law." Resistance to austerity is no more in focus than in the country which has been struggling with it the longest, Greece. May Day demonstrations took place here too, one of seemingly hundreds of protests since government spending cuts were first announced. Louise Cooper from BCG Capital Partners says struggling governments are stuck between the unpopularity of austerity which wasn't brought in soon enough. SOUNDBITE: LOUISE COOPER, MARKETS ANALYST, BGC PARTNERS, SAYING (English): "I think the trouble for certain European nations is that it took them a long time to realise quite how bad their debt situation was so by the time they started imposing austerity it was almost too late. They should have been tightening up one or two years ago and putting these plans forward to that would convince financial markets of their financial positions. Unfortunately it's all a little too late." This was the French capital Paris. It's here Europe's appetite for austerity will come into sharp focus this weekend, with the second round of presidential elections in France. Socialist candidate Francois Hollande is ahead of Nicolas Sarkozy in the polls. Hollande is committed to the French welfare model, and wants to increase government spending. And as Europe's second biggest economy that would put France on a collision course with the biggest Germany, and its leader Angela Merkel. SOUNDBITE: LOUISE COOPER, MARKETS ANALYST, BGC PARTNERS, SAYING (English): "It will be interesting if he does win because Hollande and Merkel will not be a match made in heaven. More like hell." We'll find out on Sunday. Andrew Potter, Reuters

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May Day puts austerity in focus

Wednesday, May 02, 2012 - 02:58