UNISONActive is an unofficial blog produced by UNISON activists for UNISON activists. Bringing news, briefings and events from a progressive left perspective.

Thursday 20 May 2010

Spain feels the pain – we are next‏

As we have commented before, the debt transfer from Banks to States to Workers was part of the so called rescue package for global banking. The banks collapsed, the state borrowed money from our pension funds to save them now states are clawing it back from workers, their children and pensioners. Ironically of course to pay our pension funds back as they buy the government bonds!

Here is what the Spanish government is preparing to do as of today....the ConDem government is drawing up the same plans or similar ones for us.

 
On May 12th the Prime Minister of Spain presented the Spanish Parliament with an
Adjustment Plan that would meet the requirements of the European Commission, the
Eurogroup and the Ecofin, as put forth in their meetings held on May 8th and 9th.

 
The main measures proposed by the Government (to be adopted by executive order) are:

 
A 5% average reduction in civil servants’ wages starting in July 2010, with a wage
freeze for 2011. This represents a unilateral infringement by the administration of
the Agreement for Civil Service Wages 2010-2012 signed by unions 6 months ago
with the Vice Prime Minister.

 
Furthermore, it makes compliance with the Agreement for Collective Bargaining in the private sector (2010-2012) considerably more difficult.
  • A freeze on pensions during 2011.
  • More limited access to partial retirement
  • Cuts to economic stipends established in the Dependent Persons Act
  • Reduction of public investment by 6,045 billion euros between 2010 and 2011.
  • Elimination from 2011 on of financial aid for the birth of children
  • A 600 million euro reduction in the funds for Official Development Assistance in 2010 and 2011.
These new measures are in addition to the first austerity plan with a 5 billion euro reduction in public investment, a two-point increase in VAT levels, a virtual freeze on civil servant hiring, and a proposal to review the public pension system.

 

The CCOO are saying these measures are highly unjust, placing the burden of the crisis exclusively on workers and pensioners. Quite.


 
Today the Spanish government announced a new round of austerity measures to be adopted by executive order, they are:

 
· A 5% average reduction in civil servants’ wages starting in July 2010, with a wage freeze for 2011.

 
· A freeze on pensions during 2011.

 
· More limited access to partial retirement

 
· Reduction of public investment by 6,045 billion euros between 2010 and 2011.

 
· Elimination from 2011 on of financial aid for the birth of children

 
· A 600 million euro reduction in the funds for Official Development Assistance in 2010 and 2011.

 
These new measures are in addition to the first austerity plan with a 5 billion euro reduction in public investment, a two-point increase in VAT levels, a virtual freeze on civil servant

 
hiring, and a proposal to review the public pension system. The ConDem government will probably release details of their Public Sector Pension Commission this Friday.

 
The CCOO of course claim these measures are highly unjust, placing the burden of the crisis exclusively on workers and pensioners. A tax increase is not contemplated, nor is there any coherent plan against tax fraud. Furthermore, the Government has no plan to stimulate growth, to invest in sectors that can generate wealth. In fact, the very measures proposed are economically counterproductive, and can only contribute to worsening the recession of the Spanish economy in 2010 by substantially reducing private and public spending as well as public investment. The net result will be higher unemployment rates, (the current level of 4.6 million unemployed, 20% of the workforce, is already intolerable) and less public income, leading to a spiral of a higher deficit and more debt in a progressively impoverished nation.

 
CCOO and UGT have reached the decision to mobilize against the Adjustment Plan, starting off with demonstrations, culminating in a general public sector strike on June 8th.

 
You can find a range of articles on the economic crisis, including recent updates on unions’ reaction to the austerity measures in Romania and Spain, and on the impact of the crisis in Mali & Pakistan, on the Trade Unions’ Crisis Watch at: http://www.ituc-csi.org/financialcrisis