“Spanish transport, power demand and manufacturing were disrupted today in the first general strike against labor reforms and austerity policies since Prime Minister Mariano Rajoy took office three months ago.
Iberia, the Spanish unit of International Consolidated Airlines Group SA (IAG), said it canceled 65 percent of flights, while national power demand was 16 percent below that of a typical day, grid operator Red Electrica Corp SA data showed. At Volkswagen AG (VOW3) and Renault SA (RNO) factories, 100 percent of workers followed the strike during the nightshift, the Comisiones Obreras union said in a statement.
The People’s Party government “will not cede” to union demands to retract changes to labor rules, Budget Minister Cristobal Montoro said yesterday. Thirty percent of workers planned to strike, according to a poll by El Pais.
While Rajoy’s measures have angered unions and undermined support for the party in a regional election on March 25, the government is still struggling to convince investors its policies are enough to restore the public finances and reduce a 23 percent jobless rate. Spanish 10-year borrowing costs have surged almost 50 basis points since the start of March.
“He has no choice,” said Antonio Barroso, a political analyst at Eurasia Group in London and a former government pollster. “If he gives in, the markets will punish Spain. Rajoy has his back against the wall.”
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