Popular Party stands alone in approving draconian austerity drive

Congress on Thursday approved the most brutal austerity measures since Spain returned to democracy over 30 years ago, albeit thanks only to the votes of the ruling conservative Popular Party (PP), which has an absolute majority in the lower house.

Soon after the vote-count, thousands of Spaniards in more than 80 cities held demonstrations protesting against the PP government of Prime Minister Mariano Rajoy. The marches occurred after the UGT and CCOO labor unions called public workers onto the streets to protest Rajoy’s plans to raise value-added tax (VAT) from 18 percent to 21 percent and cut civil servants’ Christmas bonuses this year.

The PP bench passed the measures, which had previously been approved by the Cabinet, with the entire opposition bloc voting against them. The sole opposition lawmaker to back the government was Carlos Salvador of the PP-aligned UPN party of Navarre.

The minority leftist parties abandoned the house before the vote took place, which showed 180 in favor and 131 against.

Spanish society is aware that the government’s policy is suicidal in economic terms"

Rajoy came to parliament to cast his vote and abandoned the building quickly. A spokesman for the prime minister’s Moncloa office explained that Rajoy was busy working at his desk.

“The government is worried but not hysterical,” said a Cabinet member. Rajoy held a meeting with the president of Siemens, Peter Löscher.

The latest battery of spending cuts and tax hikes are projected to have an impact on the budget of 65 billion euros over the next two and a half years. Apart from the rise in the standard rate of VAT, the reduced rate will rise from eight to 10 percent. Additionally, some items have been moved from the lower category to the top rate. With the exception of lower income public sector workers, civil servants are also set to lose their traditional Christmas bonus.

At a news conference with his counterpart at the UGT, Cándido Méndez, CCOO Secretary General Ignacio Fernández Toxo said: “Spanish society is aware that the government’s policy is suicidal in economic terms because it is going to spark a greater depression in economic activity and a sharp increase in unemployment.”