Spanish unions warned on Thursday that they would call a general strike if the government pushed through planned reforms of the labour market without their consent.
The threat came after union leaders held an extraordinary meeting to decide how to respond to austerity measures rushed out by the Socialist government to dispel fears a euro zone debt crisis which started in Greece will spread to Spain.
A union spokesman said a Europe-wide union meeting was planned for June 1 in Brussels to discuss alternative solutions for fighting the economic crisis.
The reaction of workers in Spain and other countries is being closely scrutinised by investors who fear massive protests could hamper the ability of governments to implement austerity measures.
The two largest Spanish unions, Comisiones Obreros (CCOO) and the Union General de Trabajadores (UGT), said they would call a general strike but would exhaust all avenues of negotiation to find agreement on labour reform.
"Both the CCOO and the UGT's view is to give a full response both to the austerity plan and to any potential labour reform that would be introduced by decree, which would be damaging to our country," CCOO head Ignacio Fernandez Toxo told journalists.
The unions have met several times with business association CEOE this week to hammer out an agreement before a government deadline for the reform at the end of May.
"We don't have a deadline... but we're aware that the circumstances call for an agreement as soon as possible," Toxo said. "If it can't be tomorrow, then Monday, and if not Monday we'll keep negotiating."
Spanish unions are an influential player in the debate over labour market reforms that economists say are vital to restoring competitiveness and sustainable growth in an economy saddled with 20 percent unemployment, the highest rate in the 16-nation euro zone.
A key demand from economists is greater flexibility in hiring and firing workers. Payments for laying off workers are among the highest in the OECD.
The unions have already called a public sector strike for June 8 to protest against austerity moves announced earlier this month to accelerate reductions in the budget deficit. The main question now is whether they will go further and call a general strike involving public and private sector workers.
"The only card the unions have left is a general strike. So the question is what do they want from the labour reform so as not to call that card. They're running out of time," said Ismael Crespo, a political analyst at Fundacion Ortega y Gasset.
The austerity package would save an additional 15 billion euros and includes wage cuts of 5 percent for civil servants this year. It aims to cut the budget deficit to 9.3 percent of gross domestic product (GDP) this year, from 11.2 percent in 2009, and then to 6 percent in 2011.
Spain's government announced the tougher austerity after the European Union and International Monetary Fund approved $1 trillion in emergency funds for weak euro countries in an effort to contain the euro debt crisis.
Spain's challenge was highlighted early this week when global financial markets slumped on news its central bank had taken over a small regional savings bank. The move sparked fears about the stability of the banking system.
ReutersLast Mod: 28 Mayıs 2010, 01:28