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Angry Protests In Spain Over Austerity Plans

(c) Sky News 2012

Scores of Spanish workers have been arrested after protesting on a day of anger over a swingeing austerity drive and changes to labour laws.

Thousands heeded the call to join a general strike, which left hundreds of flights grounded, train services cancelled and factories idling in all 17 regions of the country.

In scenes reminiscent of anti-austerity demonstrations in Greece, tens of thousands held protest marches in Madrid and other cities.

The strikes turned violent in Barcelona, where hooded protesters smashed bank and shop windows with hammers and rocks and set fire to rubbish bins.

In Valencia, protesters set fire to mattresses and a Molotov cocktail was hurled at a police car in the eastern city of Murcia. 

Authorities arrested 176 protesters across Spain and said 104 people were injured in clashes, including 58 police officers.

Unions also claimed car manufacturers Renault (Other OTC: RNSDF.PK - news) , SEAT, Volkswagen (Xetra: 766400 - news) and Ford (NYSE: F - news) were forced to stop production.

There is widespread anger at moves by Prime Minister Mariano Rajoy's conservative government - which is not yet 100 days old - to slash Spain's debt and boost the economy.

Spain's biggest unions called the 24-hour strike over labour reforms which make it cheaper and easier for companies to lay people off and cut wages without consultation.

The government claims they are needed to tackle the 22.85% jobless rate, which is predicted to rise to almost 24.3% this year.

The industrial action came hours before Mr Rajoy was due to present a budget to Parliament, which he has already indicated will be "very austere" and is rumoured to involve spending cuts of up to 15% in every government department.

In Madrid, a group of around 500 whistleblowing picketers marched and blocked traffic for about an hour as police and police in riot gear watched from the sidelines.

One protester, Angel Andrino, 31, said he was laid off a day after the labour reforms were approved in a decree last month.

"We are going through a really hard time, suffering," he said. "The rights that our parents and grandparents fought for are being wiped away without the public being consulted."

Following the protests, the unions claimed victory and demanded a "gesture" from the government to scale back its plans, warning they could cause more unrest from May 1.

But the administration insisted it would not change tack. Labour minister Fatima Banez said: "There is no stopping on the path to reform."

The government is under pressure to reduce its budget deficit, which last year ballooned to 8.51% of all the goods and services produced by Spain.

The European Union says this must be reduced to 5.3% this year and 3% in 2013 but economists warn that growth in Spain is so sluggish and debt so high, it will be a tough deadline to meet.

There is good reason for nervousness in the Eurozone. Unlike Greece and Portugal, Spain is deemed too big to bail and British banks are also heavily exposed to Spanish debt.

With unemployment running at 50% among young Spaniards and, as a member of the Eurozone, no monetary levers to pull, the government in Madrid says it has little choice but to wield the axe once again.