Until thinking changes in the north, it is unfortunately safe to say, there will be no end to the pain in Spain
Spanish firms lost little time taking advantage of revised labour laws that make it easier for them to dismiss employees, cut their wages, and unilaterally change their conditions of work. The figures for Andalucía alone show eight times as many sackings as there were this time last year in the less than two months since the laws came into effect. And cuts in pay, or an imposed choice between cuts in pay and dismissal, are already realities for many Spaniards.
So it is no surprise that the general strike called to protest against the measures by the two principal union confederations on Thursday was a relative success. It was no surprise when prime minister Mariano Rajoy's Popular party, in office for only three months, stumbled at its first electoral hurdle two days ago in regional elections in Andalucía. And it will be no surprise on Friday if the budget due to be announced by his government is greeted with a mixture of dismay, anger and incomprehension – since the scale of the cuts in spending Mr Rajoy is aiming at can only be achieved by further depressing the living standards of Spaniards.
Mr Rajoy's defenders would say that the labour laws needed reforming, and they would be right. Spain's labour market is really two markets, a privileged and highly protected one for some well-unionised workers, mainly in the public sector, and a precarious and largely unprotected one for the rest, including most of the young people starting in employment for the first time. This polarity is evident throughout much of Europe, particularly southern Europe, and is at its most extreme in Spain and Italy. It is worth emphasising that it long predates the economic crisis. It made sense in many countries to try to close this gap, reducing privilege a little at one end and increasing job security and rights at the other. The trouble is that the usual result is that secure workers lose too much and insecure workers gain too little, while employers grab the cost savings that they can. That seems to be the case with the Spanish version as well.
The larger problem is that Mr Rajoy is proffering these labour law changes as a way of promoting growth at the same time as imposing cuts that will massively inhibit it. Even if they were successful, a moot point, any benefit would be far outweighed by the impact on the economy of the severe cuts to which he has no alternative as long as a European, and a German, strategy of austerity prevails. In Italy, Mario Monti is facing a similar problem, while Greece has been in effect already overwhelmed by it – and is now into its fifth year of recession. This is a straitjacket from which even the most skilful political Houdini cannot extricate himself. Until thinking changes in the north, it is unfortunately safe to say, there will be no end to the pain in Spain.