Spain Hit By Massive Strikes

Oh well, now that austerity is the sexiest word of the year our poor socialist friends need to contend with the implications of trying to govern as if resources are limited.

June 8 (Bloomberg) -- Spanish civil servants went on strike in the largest walkout since Prime Minister Jose Luis Rodriguez Zapatero came to power as efforts to tame the euro area’s third- largest deficit rile the Socialist premier’s core supporters.

On average 75 percent of the 2.5 million public workers backed the strike, said Comisiones Obreras, one of Spain’s two biggest unions. The walkout may be a prelude to a general strike that unions have threatened over the government’s plan to overhaul labor rules that may make it easier to fire workers in a country where the unemployment rate has reached 20 percent.

“The margin to avoid a general strike is very narrow as a profound labor reform is needed,” said Jose Luis Martinez, a strategist for Spain at Citigroup in Madrid.Zapatero, who said in 2005 he slept with his union card by his bed and pledged full employment before his 2008 reelection, has been forced to cut wages and freeze pensions to convince investors and European allies he can reduce a budget deficit of 11.2 percent of gross domestic product. The risk premium on Spanish debt is at a 13-year high as the domestic backlash fuels concerns he won’t be able to make good on the deficit controls.

Its not like he has a choice.