Spanish Unions Call General Strike

MADRID—Spanish unions Friday called a general strike on March 29, the biggest challenge to date to the policies of Prime Minister Mariano Rajoy.
Last month's overhaul of Spain's rigid labor laws provides the rallying call for the protest. "It [labor reform] represents a brutal regression in hiring rules and opens the door to free dismissals," said Ignacio Fernández Toxo, the head of Comisiones Obreras union. "This country doesn't need a labor-market reform," he told journalists at a press conference.

Mr. Rajoy, leader of Spain's conservative Popular Party, came to power at the end of last year and has pursued a busy agenda of measures to overhaul one of the euro zone's largest ailing economies. Last month's labor-market reform aims to stimulate hiring in an economy suffering from a near 23% jobless rate and with a long history of high unemployment.
Other government measures include spending cuts and tax hikes worth €15 billion ($20 billion), legislation that establishes additional controls on regional spending and a new banking sector cleanup.
The labor-market reform lowers Spain's high cost of dismissal, seen by economists as a powerful disincentive for hiring, and in a direct attack against the country's unions, makes it easier for companies to opt out of sector-wide or country-wide union collective wage agreements.
The unions aren't expected to be able to marshall significant opposition to the government's labor-market reform on March 29. After winning a landslide victory in November general elections, Mr. Rajoy still enjoys high approval ratings.
A survey by pollsters Metroscopia published earlier this week by El Pais newspaper showed that while 52% of those polled disliked the labor-market reform, 67% were against the idea of a general strike, reasoning it would worsen the country's economic situation.
Government spokeswoman Soraya Sáenz de Santamaria said she regreted the unions' decision to call a strike. "This will not help the country's difficult economic situation," she told journalists after the government's weekly cabinet meeting.
Ms. Sáenz de Santamaria also presented a series of measures to protect low-income families against eviction, the government's latest attempt to put a more friendly face on economic policies centered around painful austerity measures.
The measures will be enshrined in a code of conduct that banks can adhere to voluntarily, but once they do, will be legally obliged to follow. For families whose members are all off work and have no other source of income, the code would oblige signatory banks to restructure their mortgage debt, by, for example, lengthening the term of the loan or reducing its interest rate.
In some cases, debtors would be allowed to cancel their debts once their home has been foreclosed on, even if its value is less than the outstanding debt. This isn't standard practice in Spain where mortgages are typically secured to the borrower rather than to the home itself.
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