NEWS,01.05.2013

Angry workers unite on May Day

Workers around the world united in anger during May Day rallies on Wednesday - from fury in Europe over austerity measures that have cut wages, reduced benefits and eliminated many jobs altogether, to rage in Asia over relentlessly low pay, the rising cost of living and hideous working conditions that have left hundreds dead in recent months.

In protests, strikes and other demonstrations held in cities across the planet, activists lashed out at political and business leaders they allege have ignored workers' voices or enriched themselves at the expense of labourers. In some places, the demonstrations turned violent, with activists clashing with police.
Many nations have been struggling with economic downturns for several years now, and workplace disasters in developing countries are nothing new, but the intensity of some of Wednesday's gatherings suggested workers' frustrations have grown especially acute, with many demanding immediate action to address their concerns.
The anger was painfully evident in Bangladesh, where the collapse last week of an illegally built eight-story facility housing multiple garment factories killed more than 400 in a Dhaka suburb. The building collapse followed a garment factory fire in November that killed 112 people in the country, and it has increased the pressure on the global garment industry to improve working conditions.
A loud procession of thousands of workers wound through central Dhaka on Wednesday. Many waved the national flag and demanded the death penalty for the now-detained owner of the doomed building.
From a loudspeaker on the back of a truck, a participant spoke for the throngs gathered: "My brother has died. My sister has died. Their blood will not be valueless."
The Bangladesh tragedy drew a denunciation from Pope Francis during a private Mass at the Vatican. He blasted what he called the "slave" wages of those who died, many of whom were being buried Wednesday as other bodies were still being pulled from the rubble. Francis criticized the focus on "balance books" and personal profit that he said are tied to the failure to pay workers fair wages.
In Greece and Spain, increasing numbers of people are losing their jobs as governments grappling with a debt crisis have been cutting spending, raising taxes and pursuing other stinging austerity measures. Both countries have unemployment rates hovering just above 27 percent.
Unions in Greece held a May Day strike that brought ferry and train services to a halt, and organized peaceful protest marches through central Athens. The country, which nearly went bankrupt in 2010, is now in its sixth year of a deep recession and is dependent on international bailout loans.
Turkey
While the austerity drive has succeeded in reducing high budget deficits, it has been at a huge cost: under the terms of its latest loan disbursement, Athens has agreed to sack about 15,000 civil servants through 2014.
"We are here to send a message to... those in power in Europe, that we will continue our struggle against unfair, open-ended policies that are destroying millions of jobs on a national and European level," said Kostas Tsikrikas, leader of Greek public sector labor union ADEDY.
More than 100 000 Spaniards infuriated by austerity measures and economic recession took to the streets of some 80 cities in trade union-organized rallies Wednesday, with the largest protests in Madrid, Barcelona and Bilbao.
Under banners reading "Fight for your rights," union leaders Ignacio Fernandez Toxo of Workers Commissions and Candido Mendez of the General Workers Union called on the government to reverse its austerity drive and urged politicians to agree an all-party economic plan aimed at creating jobs.
Francisco Moreno, an unemployed bookkeeper, scoffed at Spanish leaders' calls on the public to be patient. "You can only be patient if you have savings, money in the bank," the 47-year-old said. "You can't be patient if you have no income and kids to feed."
May Day events in Turkey turned violent when some demonstrators, angered at a government ban on a symbolic rally point, hurled stones, gasoline bombs and fireworks at riot police. Security forces used water cannon and tear gas to prevent crowds from accessing Taksim Square, and Istanbul Governor Huseyin Avni Mutlu said 22 police officers and at least three passersby were injured. More than 72 demonstrators were arrested.
The square is the city's main hub and is undergoing a major facelift. Authorities banned celebrations at Taksim this year, citing construction safety risks, and partially suspended public transport services to prevent large gatherings there. But trade unions had vowed to mark May Day in Taksim, which has symbolic importance because dozens of protesters were killed there in 1977 when unidentified gunmen opened fire on May Day celebrators.
"Taksim is our sacred venue. Open it up to the workers!" demanded Kani Beko, leader of a major labour union confederation.
Boos and whistles from protesters forced Danish Prime Minister Thorning-Schmidt to halt her May Day speech to thousands at the gathering in Aarhus, some 200km northwest of Copenhagen. Some believe that she has been leaning too far to the right to uphold the goals of her leftist Social Democratic Party. 
Indonesia
As she was walking to her car, a man squirted her with a water pistol. Police spokesperson Carsten Dahl said police had detained the 23-year-old man, but the premier was not injured.
Swedish police said seven people were arrested and five were injured as counter-demonstrators tried to interrupt a May Day parade by right-wing extremists in the southern city of Jonkoping. Police spokesperson Goran Gunnarsson said 60 others were briefly detained as officers tried to keep the two sides apart.
In Indonesia, the world's fourth-most populous country, tens of thousands of workers rallied for higher pay and other demands. Some also carried banners reading: "Sentence corruptors to death and seize their properties" to protest a proposal for the government to slash fuel subsidies that have kept the country's pump prices among the cheapest in the region.
In the Philippines, an estimated 8 000 workers marched in Manila to also demand better pay and regular jobs instead of contractual work. Some rallied outside the US Embassy, torching a wooden painting stamped with the words "low wages" and "union busting" that depicted Philippine President Benigno Aquino III as a lackey of President Barack Obama.
More than 10 000 Taiwanese protested a government plan to cut pension payouts to solve worsening fiscal problems, saying it reflects a government policy to bolster economic growth at the expense of workers' benefits. Analysts say poor income levels have forced many young Taiwanese to share housing with their parents and delay marriages.
And in Cambodia, more than 5 000 garment workers marched in Phnom Penh, demanding better working conditions and a salary increase from $80 to $150 a month. About a half million people work in the country's $4.6bn garment industry, which makes brand name clothes for many US and European retailers.
In Mexico, public school teachers who have blocked highways and battled police in recent months marched peacefully on Wednesday in Mexico City and the southern city of Chilpancingo, hoping to block an education reform law that introduces teacher evaluations and diminishes the power of unions in hiring decisions.
"Not here, not there, the reform shall not pass anywhere!" the marchers chanted.
In his 1 May speech, President Enrique Pena Nieto promised new effort to produce more salaried jobs, noting that two-thirds of Mexicans have no benefits and low wages.
In Havana, tens of thousands of Cubans joined the communist nation's traditional May Day march in the Plaza of the Revolution. This year's edition was dedicated to Cuba's ally, the late Venezuelan President Hugo Chavez. Cuban President Raul Castro attended the event, but did not speak.

 

Anti-austerity protests sweep Europe

Trains and ferries were cancelled and hospital staff walked off the job in Greece on Wednesday and thousands were due to demonstrate across Spain as May Day triggered protests against harsh government spending cuts.
Separately, Turkish riot police fired water cannon and tear gas to disperse crowds gathering in central Istanbul for a rally on what has become a traditional labour holiday.
In Spain, where the unemployment rate stands at a record 27%, the two largest trade unions, CCOO and UGT, called on workers and the unemployed to join over 80 demonstrations across the country.
In a column in financial newspaper El Economista, CCOO Secretary General Igancio Fernandez Toxo criticised the government's "huge irresponsibility" in allowing unemployment to rise to such levels.
Candido Mendez, head of UGT, said having more than 6 million people unemployed meant there had "never been a May 1 with more reason to take to the streets".
In Athens, about 1 000 policemen were deployed to handle any violence during rallies and strikes called by public and private sector unions.
It is the latest in a long line of strikes and protests in the debt-laden country ravaged by its sixth year of recession and popular fury over wage and spending cuts.
"Our message today is very clear: Enough with these policies which hurt people and make the poor poorer," Ilias Iliopoulos, general secretary of public sector union ADEDY, told Reuters.
"The government must take back the austerity measures, people can't take it anymore."
Participation, however, was expected to be well below the levels of major protests last year when as many as 100 000 Greeks marched to the central Syntagma square chanting slogans.
Unions themselves expected turnout to be low in Greece with the traditional May 1 holiday falling just a few days before Greek Orthodox Easter, which meant public schools were shut and many workers had already left for vacation.
Public transport in Athens was disrupted with buses and subways halted, while ships and ferries stayed docked at ports after seamen also walked off the job. Bank and hospital workers also joined the one-day strike.
Greek Prime Minister Antonis Samaras has sought to maintain a hard line against striking workers in a bid to show European Union and International Monetary Fund lenders - as well as the public - that he is determined to push through unpopular reforms.      
Turkey, Russia
In Istanbul, thousands of police were stationed across the city centre to block access to the main Taksim square as crowds of protesters converged in different parts of the city early in the morning attempting to storm police barricades.
The incidents followed the pattern of recent years, when May Day demonstrations in Turkey's largest city have often been marked by clashes between police and protesters.
Authorities often use force to prevent the rally happening in the centre of the city, having this year already denied large trade unions permission to march on Taksim, saying major construction work there would make it too dangerous.
Two officers were wounded by stones and metal objects thrown at police lines, state-run TRT television said, citing the Istanbul governor's office.
In Russia, around 1.5 million Russians were expected to participate in May 1 parades - a fraction of the millions that used to march in the Soviet times. 

Chinese manufacturing falls in April

China's monthly index of manufacturing activity fell in April, a report said Wednesday.
The Purchasing Managers' Index for the manufacturing sector fell to 50.6%, down from 50.9% in March, the China Federation of Logistics and Purchasing said.
The 50% mark denotes the divide between expansion and contraction.
The index has remained above 50% since October, which the government said earlier was a sign that it had arrested a slowdown in growth in the world's second-largest economy.
The slight drop in April indicated slower growth in manufacturing and the need for a stronger momentum in the country's economic growth, the federation said.
Annual economic growth fell to 7.8% last year, the slowest since 1999, down from 9.3% in 2011. China has been dealing with slowing demand for its exports amid the eurozone debt crisis and uncertainty over the US economic recovery, as well as growing production costs including rising wages.

Greeks, police clash in May Day protests

Trains and ferries were cancelled and hospital staff walked off the job in Greece on Wednesday as workers marked May Day with a strike against harsh austerity required by the country's foreign lenders.
Elsewhere, Turkish riot police fired water cannon and tear gas to disperse crowds gathering in central Istanbul for a rally on what has become a traditional labour holiday.
Greece's 24-hour walkout was called by its two major public and private sector unions. It is the latest in a long line of strikes and protests in the debt-laden country ravaged by its sixth year of recession and popular fury over wage and spending cuts.
"Our message today is very clear: Enough with these policies which hurt people and make the poor poorer," Ilias Iliopoulos, general secretary of public sector union ADEDY, told Reuters.
"The government must take back the austerity measures, people can't take it anymore."
About 1 000 policemen were deployed in central Athens to handle any violence during the rallies, though participation is expected to be well below the levels of major protests last year when as many as 100 000 Greeks marched to the central Syntagma square chanting slogans.
Demonstrators began to slowly gather in central squares in Athens to rally before marching to parliament, the site of frequent clashes between police and protesters in recent years.
Unions expected turnout to be low with the traditional May 1 holiday falling just a few days before Greek Orthodox Easter, which meant public schools were shut and many workers had already left for vacation.
Public transport in Athens was disrupted with buses and subways halted, while ships and ferries stayed docked at ports after seamen also walked off the job. Bank and hospital workers also joined the one-day strike.
Greek Prime Minister Antonis Samaras has sought to maintain a hard line against striking workers in a bid to show European Union and International Monetary Fund lenders - as well as the public that he is determined to push through unpopular reforms.
The lenders' decision to disburse long-delayed aid last year has eased fears that Greece could go bankrupt and be forced to leave the eurozone, but the country still faces deep challenges from a volatile social climate and domestic opposition to a reform programme that includes firing civil servants.
In Istanbul, thousands of police were stationed across the city centre to block access to the main Taksim square as crowds of protesters converged in different parts of the city early in the morning attempting to storm police barricades.

UK manufacturing contracts slightly

British manufacturing contracted by the narrowest of margins in April, and much less than expected, the first major set of data for the second quarter of the year showed on Wednesday.
The Markit/CIPS Manufacturing Purchasing Managers' Index (PMI) rose to 49.8 in April from an upwardly revised 48.6 in March, putting the sector within a whisker of the 50 line that separates growth from contraction.
Economists had expected a much weaker reading of 48.5.
Manufacturing output fell 0.3% in the first quarter while the economy grew 0.3%, the preliminary official estimate of Britain's gross domestic product in the January-March period showed.
"It is welcome to see the sector showing signs of stabilising in April... The sector should at least be less of a drag on broader GDP growth in the second quarter," said Rob Dobson, senior economist at Markit and author of the survey.
He added that a strengthening in manufacturing would also boost other parts of the economy, such as the services.
Manufacturing accounts for 10.5% of UK economy, according to the latest GDP release.
April's improvement in factory activity was helped by the first expansion in new orders since January, with the related sub-index climbing to 50.6 from March's 49.3.
New export orders rose for the first time in more than a year and at the fastest pace since July 2011 on the back of increased sales to North America, the Middle East, Latin America and Australia. But demand from the eurozone remained sluggish.
There was marginal growth in output led by the production of consumer items and investment goods such as factory equipment.
There was also good news on inflation, with manufacturers' selling prices rising at the slowest pace since November while lower commodity and energy prices contributed to the first dip in their input costs since August.
"This provides headroom for the Bank of England's MPC (Monetary Policy Committee) to extend its accommodative policy stance if GDP growth fails to gain traction in the coming months," Dobson said.
If the central bank were to announce more asset purchases this year, it would most likely do so either next week when it updates its quarterly economic forecasts or after its new governor Mark Carney takes over in July.
On a gloomier note, factories shed jobs for the third straight month in April.

Venezuela MPs come to blows

Political tensions over Venezuela's disputed presidential election boiled over on Tuesday in the National Assembly as government and opposition lawmakers said they physically clashed.
"I'm not the only one who has been beaten. They have struck several lawmakers. [Assembly speaker] Diosdado Cabello has to be held to account personally," said opposition lawmaker Julio Borges.
He said he was denied the right to speak in the assembly by the body, which is controlled by a majority loyal to socialist President Nicolas Maduro, because opposition lawmakers have not recognized Maduro's reelection.
So the ruling party majority voted to deny opposition lawmakers their right to speak in the forum to which they were elected, Borges said.
A combative Cabello told the opposition legislators - many of whom shouted in protest and frantically blew whistles - that "as long as [national] authorities are not recognized and the Republic's institutions are not recognized... the ladies and gentlemen of the opposition can go talk to [TV network] Globovision, to [newspaper] El Nacional.
"But they won't be doing it here" in the assembly, Cabello said.
Authorities on Monday began a partial audit of the disputed election won by Maduro, the late Hugo Chavez's handpicked successor, as the opposition rejected the move as insufficient.
Opposition leader Henrique Capriles, who says he was the real winner of the 14 April presidential vote, has accused election officials of rejecting his appeal for a full recount on the orders of the ruling Socialist Party.
The National Electoral Board has ruled that Maduro won by 1.49% of the vote, amending an earlier tally that had Maduro up by 1.8%.
Spain impertinent
The Board has insisted it is legally impossible to carry out a full recount, and that no audit can reverse Maduro's win.
The 40-year-old Capriles has said he will not accept anything short of a full recount.
Capriles - a businessman, lawyer and Miranda state governor - alleges that some voters cast multiple ballots or even voted on behalf of the dead.
Both the government and the opposition have urged their supporters to turn out for massive street demonstrations planned for 1 May.
Former colonial power Spain has offered to mediate between government and the opposition. But on Tuesday Maduro shot down the offer with an insult, calling the Spanish Foreign Minister "impertinent".
"Mr Foreign Minister, get your snout out of Venezuela.... Just get out of here, you impertinent Spanish foreign minister," he said. "Respect Venezuela."

US fiscal cliff facts

The so-called fiscal cliff is a combination of dramatic spending cuts and tax increases mandated to take effect beginning in January if President Barack Obama and Republicans cannot bridge their differences on how best to reduce the nation's budget deficit and debt.To add to a drama that could reverse the slow US recovery and impact the global economy, the United States is also about to reach its borrowing limit, so Congress will also be asked to raise the government's debt ceiling.

What is the fiscal cliff?

The Budget Control Act of 2011 codified in law a grudging political compromise forcing the government to slash spending by $1.2 trillion over 10 years from January 1 2013. Next year's cuts, called "sequestration," would be about $109bn.Also on that date, a package of tax reductions and an extension of unemployment benefits will expire, meaning taxes will rise significantly for most Americans.

Why will this happen?

Democrats and Republicans have long been deadlocked over whether to address a $1 trillion-plus annual budget gap with higher taxes or lower spending.The Budget Control Act was a poison pill deal designed to force them to find a less austere compromise, but political wrangling and dysfunction meant no deal was done, and the deadline is now looming.

What happens if the cliff is not avoided?

Together, higher taxes and lowered spending could slice the $1.1 trillion deficit racked up in fiscal 2012 (ended September 30) by almost $500bn next year, according to the Congressional Budget Office, vastly improving the government's financial picture .But the CBO estimates the shock treatment would send the country back to recession and push the unemployment rate to 9.1%.Deep cuts would come to both defence and non-defence spending. Government suppliers and contractors would lose business, and temporary furloughs could be in store for tens of thousands of federal employees.Taxes and automatic paycheck deductions would increase for most Americans, reducing the cash they have for spending, and taxes on capital gains and dividends would rise, hitting investors.

What is the debt ceiling?

The US government will hit its statutory $16.39 trillion debt limit on Monday, according to Treasury Secretary Timothy Geithner. The limit is set by Congress, and if it is not raised, the United States will not be able to borrow any more money and would, in theory, be forced to slash spending to make ends meet. Possible, but desperate, remedies would include halting pay to the military, retirement health benefits, social security, and failing to pay government debts.

Will the US default on its debt?

Not immediately. The Treasury has various extraordinary measures in its armory, including halting the issuance of securities to state and local governments, which could buy about two months of leeway.

What would a default mean?

No one is sure: the dollar, and Treasury bonds, are the primary currency of global finance, and holders do not really have any alternatives. And most believe that eventually the US government would make good on its debts. However, the country's credit rating could be further downgraded, likely pushing up its borrowing costs over the medium term and possibly diminishing the dollar's cachet in world finance.

What will Congress do?

Eventually, Congress is likely to raise the debt ceiling but Republicans who run the House of Representatives will use the showdown as leverage to demand spending cuts from Obama in return. It is uncertain how high the raised borrowing limit will be, and any resolution will likely trigger a new confrontation between Obama and Republicans the next time around.

Talks stall as fiscal cliff looms

Two days of last-gasp talks produced no deal on Sunday between US political leaders struggling to averting a fiscal calamity due to hit the American and world economy within hours.Party leaders in the US Senate groped for a compromise to head-off a punishing package of spending cuts and tax hikes that is due come into force on January 1 and which could roil global markets and plunge the US into recession.Senate Republican minority leader Mitch McConnell warned that, despite through-the-night talks, negotiators were still a long way from success, as they raced against the ebbing 2012 calendar in search of a compromise.McConnell said he received no response to a "good faith offer" to Senate Democrats and had spoken twice by telephone with his old friend and sparring partner Vice President Joe Biden in the hope of breaking the stalemate.Senate Democratic Majority Leader Harry Reid agreed that talks were at a standstill, and warned that Americans could ring in the New Year with no deal to avert a budget disaster known as the "fiscal cliff.""There is still significant distance between the two sides, but negotiations continue," Reid told the Senate, after huddling for nearly two hours with his Democratic caucus on one of the latest December Senate workdays in 50 years."There is still time left to reach an agreement, and we intend to continue negotiations," he said, as he ordered the Senate back into session at 11:00am (16:00 GMT) Monday, New Year's eve and the last day before the deadline.Reid said Democrats were unwilling to brook talk of social security cuts."This morning, we have been trying to come up with some counteroffer to my friend's proposal," Reid told the Senate. "We have been unable to do that."The already tense mood on Capitol Hill had soured during Sunday's confusing hours, when some lawmakers tossed out varying versions of what may or may not be in Democratic and Republican offers. "I'm incredibly disappointed we cannot seem to find common ground. I think we're going over the cliff," Republican Senator Lindsey Graham said on Twitter.Moderate Democrat Clair McCaskill was also pessimistic."This is definitely not a kumbaya moment," she said.Earlier, President Barack Obama accused Republicans of causing the mess, saying they had refused to move on what he said were genuine offers of compromise from his Democrats."Now the pressure's on Congress to produce," Obama said, in an interview with NBC's "Meet the Press" that was recorded on Saturday, a day after he expressed modest optimism that a deal could be reached.Obama said it had been "very hard" for top Republican leaders to accept that "taxes on the wealthiest Americans should go up a little bit, as part of an overall deficit reduction package."But Republicans were irked by Obama's tone. "I don't know if this is the president saying $250 (thousand) or 'Go to hell'," Graham told reporters, referring to Obama's insistence that taxes rise on households income greater than a quarter million dollars per year.The Senate's number two Democrat, Dick Durbin, said Republicans want the tax threshold be raised to $550 000 per household and that Democrats might counter with $450 000, considerably higher than the president's $250 000.But Reid warned: "We're still left with a proposal they've given us that protects the wealthy and not the middle class. I'm not going to agree to that"If no deal is reached, a package of tax cuts for all Americans that was first passed by then-president George W. Bush will expire on January 1.All American workers will see their own paycheck hit and the broader economy will suffer from massive automatic spending cuts across the government.Experts expect the US economy to slide into recession if the standoff is prolonged, in a scenario that could cause turmoil in stock markets and hit prospects for global growth in 2013.The president won re-election partly on a platform of raising taxes on the rich, but Republicans who run the House of Representatives oppose tax hikes as a point of principle and claim Obama is addicted to runaway spending.Any deal must pass the Senate, before going to the House, where such is the power of the conservative bloc of the Republican Party, it is unclear whether any solution backed by Obama can win majority support.If leaders fail to find agreement, Obama has demanded a vote on his fallback plan that would preserve lower tax rates for families on less than $250 000 a year and extend unemployment insurance for two million people.Republicans admitted such an option could emerge on Monday.

Spain faces €207bn headache in 2013

Spain defied the markets by averting a sovereign bailout this year but high interest rates could yet force Madrid to its knees as the nation confronts a €207bn financing headache in 2013.The eurozone's fourth-biggest economy has skirted a rescue so far even after slipping into a recession in mid-2011 that has sent the unemployment rate soaring to 25%, the highest in Spain's modern history.Prime Minister Mariano Rajoy's government reached out in June for a eurozone rescue loan of up to €100bn to fix the balance sheets of Spanish banks, crushed by bad loans since a 2008 property crash.But even as investors fled Spain, sending its 10-year-bond yield above 7% mid-year as they watched Madrid struggle to curb soaring public debt, Rajoy managed to swerve the politically costly option of pleading for international help.European Central Bank chief Mario Draghi gave decisive support in September when he announced the bank's readiness to buy an unlimited sum of bonds to curb borrowing costs for member states that accept strict conditions.The prospect of such intervention alone was enough to calm the selling of Spanish debt securities.A grateful Rajoy says he can get by for now without even seeking the ECB's bond-buying intervention.Spain's 10-year bond yields were trading below 5.3% in the past week.In his final news conference of the year, the prime minister warned that Spain's economy faced a "very tough" year ahead."Today we are not thinking of asking the European Central Bank to intervene to buy bonds on the secondary market but that is a very useful instrument that is available to all countries of the union," he added."If Spain and its government believe that it is necessary to use it, let there not be the least doubt that we will do so. But in principle today we are not thinking of doing it," the premier said on Friday.That could change, analysts say.Spain's budget for 2013 anticipates that the Treasury will have to issue €207.2bn in gross debt in 2013, almost all through bonds and bills, to cover debt repayments and new financing needs.That compares to the €186.1bn in gross debt that last year's budget previewed for 2012."The country is heading in the right direction in reducing its deficit. But in the end, it will all depend on the markets," said Rafael Pampillon, head of economic analysis at Madrid's IE Business School.Concern over a shift in Italian economic policy with February 24-25 elections on the horizon, and doubts over Spain's ability to finance its debts or meet its deficit-cutting targets could yet push up Spanish borrowing costs, he said.At one point in mid-summer, investors in Spanish 10-year bonds demanded a premium of 600 basis points in annual return over the safe-bet German equivalent. Since Monti's offer to intervene, that has fallen to around 400 points, still a significant extra cost.Most economists now believe Spain can skirt a rescue at least in the immediate future.A sovereign rescue is not impossible, said Edward Hugh, economist based near Barcelona in the northeastern region of Catalonia."But they will definitely put it off for as long as they can, and at the moment it seems that they can put if off for quite a long time," he added.In the meantime Spain still faces steep financing costs, said Jesus Castillo, economist at French investment bank Natixis.The Spanish 10-year bond yield affected not only the state's borrowing cost but also that of many households and businesses, Castillo said.The risk premium charged on Spanish debt, even now, was "not viable over the long term", he warned."If the Spanish economy is being strangled today it is because a high interest rate is killing off investment plans as they are born," he said.It is an argument that seems to plead for a bailout.If the ECB could bring down interest rates, some say, it would breathe new life into the economy, which is expected to shrink 1.5% this year. Next year, the government tips a further 0.5% slump and most private forecasters are expecting a much sharper decline.But Spaniards themselves seem to be divided over a bailout, even as they suffer an unprecedented programme of austerity measures designed to bring the public deficit under control.A survey by Madrid pollster InvyMark for a Spanish television channel this month found 54.5% of those asked believed Rajoy should not ask for a sovereign bailout, against 31.5% who were in favour.More than two-thirds - 69.1% - said they thought such aid from Europe would not be positive for hard-hit Spaniards.

Merkel challenger remarks spark outrage

Chancellor candidate Peer Steinbrueck was widely criticised on Sunday, even by his own centre-left Social Democrats (SPD), for saying German leaders are underpaid. Steinbrueck has struggled to gain ground against Chancellor Angela Merkel ahead of next September's election, in part due to lingering criticism over him earning €1.25m as an after-dinner speaker in the past three years.The remarks from the former finance minister about what he called the inadequate compensation for the chancellor drew speedy rebukes across the country's political spectrum, including from the last SPD chancellor Gerhard Schroeder."A German chancellor does not earn enough based on the performance that is required of her or him compared with the jobs of others who have far less responsibility and far more pay," Steinbrueck, 65, was quoted on Sunday by the Frankfurter Allgemeine Sonntagszeitung newspaper saying. "Nearly every savings bank director in North Rhine-Westphalia earns more than the chancellor does," Steinbrueck said of his home state. Merkel's pay is set to rise by €930 per month to €17 106 in 2013 along with pay rises for her ministers and members of parliament, increases that have been criticised by some for sending the wrong signal in an era of austerity. "Some of the debates kicked up by the 'guardians of public virtue' are grotesque and are harmful for anyone considering getting involved in politics," Steinbrueck said. ElectionThe SPD trails Merkel's conservatives by 10 points in opinion polls, but, with its Greens allies, it does have a chance of winning power in September because of the prolonged weakness of Merkel's Free Democrat (FDP) coalition partners. Steinbrueck, whose blunt talk makes him popular among some voters despite him never winning a major election and him being defeated as state premier in North Rhine-Westphalia in 2005, said there were times in his career when he was not as well off and admitted he was now a "wealthy Social Democrat". Schroeder, chancellor from 1998 to 2005, has endorsed Steinbrueck to lead his party against Merkel but distanced himself from Steinbrueck's views on pay."In my view politicians in Germany are adequately compensated," Schroeder told Bild am Sonntag newspaper. "I was certainly always able to live off the pay. And anyone who doesn't feel it's enough pay can always look for another job."Other SPD leaders indirectly criticised Steinbrueck. Dieter Wiefelspuetz, a top SPD member of parliament, said politicians were misguided if they compared their wages to private industry."To serve as chancellor is a fascinating job and the pay is definitely not shabby," he said.Steinbrueck was once seen as the centre left's best hope of winning back the chancellorship. He was popular as the no-nonsense finance minister and the SPD hoped he would siphon centrist voters away from the conservatives. But the controversy over his earning €1.25m for 89 speeches will not go away and his campaign has been marred by setbacks and awkward comments. Analysts say he is also struggling to win over female voters, many of whom are put off by his combative style. "Merkel is popular due to a 'woman's bonus' that she gets," Steinbrueck told the paper.

NEWS,22.04.2012.

France votes as Sarkozy faces defeat after one term

France's incumbent President and right-wing ruling party Union for a Popular Movement (UMP) candidate for the French 2012 presidential election Nicolas Sarkozy smiles on April 22, 2012 as he leaves the polling booth before casting his vote for the first-round of the 2012 presidential election at a polling station in Paris.Tens of millions of French voters turned out Sunday for the first round of a presidential poll that is expected to see the left oust Nicolas Sarkozy after only one turbulent term in office.The left has not won a presidential election in a quarter of a century, but with France mired in low growth and rising joblessness, opinion polls predict Socialist challenger Francois Hollande will beat the right-wing incumbent.Turnout at 5:00pm (1500 GMT), with three hours of voting to go, was strong at almost 71 per cent, belying fears that a low-key campaign would be capped by mass abstentions in the vote itself.Polling organisation IFOP predicted an overall turnout of 80 per cent.Sunday's poll will whittle down the field from 10 to two and Hollande and Sarkozy are expected to face each other in the May 6 run-off to decide who runs France, a nuclear-armed power and Europe's second largest economy.Hollande says Sarkozy has trapped France in a downward spiral of austerity and job losses, while Sarkozy says his rival is inexperienced and weak-willed and would spark financial panic through reckless spending pledges.The eurozone debt crisis and France's sluggish growth and high unemployment have hung over the campaign, with Sarkozy struggling to defend his record and Hollande unable to credibly promise spending increases."I have never missed a vote, but this time I feel little enthusiasm for the election," said 62-year-old retired high school teacher Isabelle Provost as she emerged into bright Paris sunshine after casting her ballot."Economically there is little difference between the two main candidates," she said, echoning the sentiment of many other voters of the right and the left.If, as expected, Sarkozy polls second, he will be the only incumbent French president to lose a first round-vote in the history of the Fifth Republic, which came into being in 1958.Hollande voted in his stronghold, the country town of Tulle in the central Correze region, where he is the local member of parliament and heads the regional council. He was warmly greeted by officials and voters alike."I am attentive, engaged, but first of all respectful," he told reporters. "The day ahead will be a long one, this is an important moment."Sarkozy and his former supermodel wife Carla Bruni cast their ballots in Paris' plush 16th district, a stronghold of his right-wing UMP party.Hollande was to make a speech in Tulle minutes after polls close and official results estimates are announced on the prime-time 8:00 pm television news, while Sarkozy was to speak in Paris at around 9:00 pm.

Protests in Spain

 

 Thousands of people demonstrated in the streets of Barcelona on Saturday a day after the government announced cuts to public spending in health and education.Education unions which organised the demonstration said 30 000 turned out to voice their opposition to the cuts, to be carried out at the national and at the level of the local region, Catalonia. Police put the figure at 2 000.Rosa Canyadell, of the education USTEC said the authorities were in the process of dismantling state education."Education is the best way of overcoming the economic and social crisis, and public education is the only way we can guarantee social cohesion," said a statement by parents, unions and educational associations.Spain's ruling conservative Popular Party has vowed to cut the country's deficit, which reached 8.51% of GDP in 2011.On Friday it adopted an austerity budget designed slash spending by 10 billion euros ($13 billion) a year: three billion euros of those cuts will come from education.The measures include letting regional governments expand class sizes by 20% and raising university fees to an average 1 500 euros from 1 000 euros.Spain's main unions have called for a day of protests against the cuts in health and education spending on April 29.

NEWS,29.03.2012.

Spaniards strike against 'unstoppable' job reforms

Spanish workers have staged a general strike to protest against labour reforms which the government declared "unstoppable" but many ignored the action, fearing for their jobs in a country with the EU's highest unemployment rate.Factories across the nation were silent and ports closed, while television and transport were disrupted by the strike against the austerity policies of Prime Minister Mariano Rajoy - whom Spaniards elected by a landslide only four months ago.Police arrested a number of protesters in Madrid while small-scale violence flared in Barcelona, Spain's second city. Tourists were locked out of the Alhambra, a 14th-century Moorish palace in the southern city of Granada which is one of Europe's great cultural monuments.Strikers promised a wave of protests to confront Rajoy's conservative government over reforms making it cheaper for companies to fire staff and dismantling a nationwide system of collective pay bargaining."We don't have much hope, but this is just the beginning," said Trini Cuesta, a 58-year-old employee at a public hospital in Barcelona. "It's not just about labour reform, we're against policies that are provoking social and economic ruin. Social protests must rise."Spain is tipping into its second recession since the end of 2009 and some observers expect at least another million people to join already swollen unemployment lines. The jobless rate is already 23% and almost half of under 25-year-olds are out of work.Rajoy's government said it was committed to making labour reforms which it argues will help to reduce unemployment by making the labour market more efficient. "The agenda for reform is unstoppable," Labour Minister Fatima Banez said.Police presence was particularly heavy around parliament where politicians were putting in a longer work day than usual as Rajoy sought approval for five different measures, including funding for indebted local governments to pay suppliers.Spaniards have so far been tolerant of Rajoy's efforts to reform the labour market and meet strict European Union-imposed deficit goals to ensure it avoids a Greek-style debt crisis.But the general strike, the first since September 2010, showed that patience may be wearing thin. The largest union put support for the strike at 77% while the government said the work day was proceeding normally but gave no overall tally.Spain's blue chip index fell 0.87%, its eighth consecutive session of declines as concerns over the country's finances returned.There were pockets of violence in Barcelona, where protesters set garbage bins on fire and threw chairs from the famed outdoor cafes of Spain's second largest city onto the street, but no injuries were reported.Union members waving red flags gathered in major cities where they plastered stickers on shop windows reading "Closed for Strike", though many remained open for business.Police barricaded parliament and arrested 58 people in Madrid, many of whom were trying to stop people going to work.Many workers crossed the picket lines, saying they feared losing their jobs or unwilling to lose the average of around 100 euros which will be docked from the pay cheques of the strikers.While many Spaniards are fighting to preserve protection for their jobs, others are on short-term contracts of typically six months with little protection.These workers fear their employers could punish strikers by failing to renew their contracts when they expire, and give the job instead to one of the army of unemployed.Fewer than a fifth of Spanish employees are currently affiliated with the country's two biggest unions and many feel they don't represent the wider workforce."A lot of people actually blame the unions in part for the rigidity in the labour market and lack of competitiveness, so they aren't exactly in the position to rally a lot of people and the support for the strike reflects that," said David Bach, political analyst at IE business school in Madrid.

 However, union members are ready for a long fight. "This is the largest cut of (workers') rights since anyone can remember. There has to be a better way to get out of this crisis," UGT union employee Marta Lois, 40, said on Madrid's main street Gran Via, where protesters blocked traffic."Don't forget this is just the first major event of what is likely going to be a long year of demonstrations against government policies," Antonio Barroso, political analyst with Eurasia Group said.Rajoy said on Tuesday his administration would pass a "very, very, austere budget" on Friday. His goal of cutting the deficit this year to 5.3% of gross domestic product implies nominal cuts of at least 35 billion euros ($57 billion).The cuts are meant to keep borrowing costs down as well as working towards meeting the EU's 3% deficit limit next year, but some economists say they will deepen the looming recession.The strike halted overnight production at factories from Barcelona in the north to Cadiz in the south, with unions reporting full stoppages at General Motors Espana, Renault, ArcelorMittal and Acerinox.Transport employees provided a basic level of service, meaning one in four buses and about a third of metro and local trains were expected to run. Most domestic and European flights were grounded although long-haul services continued."We're offering the government a chance to start a different path (of reform) in search of wider consensus," Ignacio Fernandez Toxo, head of Spain's largest union Comisiones Obreras said. "If not there will be rising social conflict."Despite the promises to push on with reforms aimed at winning approval from Brussels, Rajoy's People's Party suffered a surprise setback in a regional election on Sunday, meaning he must measure his steps to avoid provoking wider discontent.A high turnout is expected at an evening march in Madrid that will end at the central Puerta del Sol square, cradle of last year's anti-austerity "Indignant" movement.National grid operator REE estimated electricity demand - a key indicator of economic activity - for Thursday as a whole would drop by 14.8% from Wednesday to 571 gigawatt-hours, a level comparable to a public holiday or a weekend.During the last general strike in September 2010, demand fell by 12.6% from the day before.