Bonds News

Spanish unions to stage general strike over cuts

* Spain faces day of travel chaos

* Minimum service for trains and planes in place

* Action unlikely to sway government’s austerity drive

MADRID, Sept 29 (Reuters) - Trade unions have called for a general strike across Spain on Wednesday to protest against harsh cuts the government says are needed to cut the country’s budget deficit.

The first general strike in eight years will be a test for Prime Minister Jose Luis Rodriguez Zapatero’s Socialist government, though with polls showing only 9 percent of workers will definitely turn out it will not shake his austerity plans.

Zapatero was forced to impose spending cuts after investors punished Spanish borrowing costs earlier this year over fears the country could be heading for a debt crisis that would trigger a Greek-style bailout.

Spaniards will face transport disruptions throughout the day, although Madrid metro officials said 50 percent of services would run in peak hours and aviation officials said 20-40 percent of international flights would go ahead.

Even if they do manage to board an infrequent and packed bus or train, Spaniards might not have too much to read because newspaper workers walked out a day early on Tuesday so they could return to provide coverage of the strike.

Unions, which represent 16 percent of workers in the country, say the government will be forced to reverse some of its austerity plans that include wage cuts for civil servants, pension freezes and job reform laws.

But analysts believe a U-turn on the the government’s plans to meet European Union deficit targets is unlikely, while many Spaniards believe striking is not the best form of protest in a country where 20 percent are unemployed.

“The strike will not do anything at all to remedy Spain’s economic situation and will also worsen our image abroad even more,” said Camilo Abietar, chairman of the Organisation of Professionals and Self-Employed Workers.

“The economy improves when employment is created, not when obstacles are put to work,” said Abietar, whose organisation represents more than 195,300 self-employed workers.

The strike in Spain coincides with union action in Brussels, Athens and other European cities as austerity measures bite across the continent [ID:nLDE68N11V].


Full coverage of European strikes, protests [ID:nLDE68R1US]


On Tuesday, Spanish stocks closed down by 0.21 percent ahead of the strike, while the key spread of 10-year government debt to euro zone bunds was around 195 basis points, about 60 higher than where it was in mid-July.

Spain’s main unions have promoted the strike heavily and say it will draw more than the 2.5-3 million workers who went on strike in France earlier this month.

It has also attracted the attention of artists across the country, with top film director Pedro Almodovar due to stop shooting his latest movie in protest at the government’s cuts.

But it is doubtful it will do much to influence the government, which is due to present full details of its 2011 budget on Thursday [ID:nLDE68N02X]. (Reporting by Nigel Davies)