Right-wing prime minister Mariano Rajoy has unveiled the biggest attack on SpainÂs welfare state in history in a move described by radical opposition MPs pouring Â Âgasoline onto the streetsÂ.
The measures include a swathe of new taxes and spending cuts designed to reduce the budget deficit by 65 billion euros by 2014 in line with EU demands linked to a deal that provides a 100 billion euro handout to the countryÂs banks.
Rajoy, who pretty much admitted to MPs that heÂd Â ditched all the campaign promises that got him elected last November, proposed a 3-point rise in the main rate of the regressive Value Added Tax on goods and services to 21%, and outlined cuts in unemployment benefit and civil service pay and benefits.
Amid Â jeers and boos from the opposition, Â he also announced new indirect taxes on energy, plans to privatise ports, airports and rail assets, and a reversal of property tax breaks that his party had restored last December. Cuts to city hall governments, closures of public companies andÂ cuts to time off for public sector workers for trade union duties were among the long list of measures adding misery to the general populace.
As the right-wing leader unveiled his fresh attack on welfare and workers, hundreds of coal miners marched through the centre of the capital to protest against a previous 60% reduction in coal subsidies that will force pit closures, leave them jobless and their communities devastated.
MinersÂ protest in Madrid
The miners, who had walked some 400 km (250 miles) from the Asturias region over 44 days, were joined by thousands of supporters, including trade unionists, on Wednesday after receiving a heroÂs welcome in Madrid on Tuesday night as they marched in with lamps lit on their helmets.
Public anger over spending cuts has escalated as school and hospital budgets have been savaged. ÂWithout the mines we donÂt have anything, absolutely nothing in our region,Â said one of the miners in the protest, Albano Gonsalvez.
Despite nearly a quarter of the workforce and more than half of Spanish youth on the dole queues, the government said unemployment benefit would fall to 50% of previous earnings from 60% after the first six months on the dole.
In short, Rajoy, who started his administration with tax and cuts measures that deepened the recession and the pain felt by the majority of Spaniards, has now added some more Â in spades.
United Left leader Cayo Lara warned that the cuts were Âgasoline to the streetsÂ.
Sporting, along with his parliamentary colleagues, a black top in solidarity with the miners, Lara said RajoyÂs policies were aÂ Âsea of contradictionsÂ. Â He reminded the Popular Party leader of the scathing attack he had made on former Socialist prime minister JosÃ© Luis RodrÃguez Zapatero when he had increased the sales tax as part of a series of austerity packages that have turned SpainÂs economic and public finance mess into a veritable catastrophe. Similarly, Rajoy, the then opposition leader hadÂ Â attacked the socialist administrationÂs cuts to the wages of public sector workers.
Turning his fire on the finance minister Cristobal Montoro, Lara said it was ÂgrotesqueÂ that the finance minister could be justifying tax hikes while there were so many wealthy individuals and corporations who paid little or not Â tax at all, something that had been encouraged by the governmentÂs Âunseemly and unfair tax amnestyÂ that was passed in April.
And he renewed calls for a progressive tax reform, to raise corporate taxes and for the government to back a Robin Hood style tax on financial transactions.
Lara slammed a fresh round of cuts to wages through the elimination of the Christmas ÂbonusÂ. And he said the attack on time available to trade union reps to support workers was another ÂgiftÂ to employers after labour reforms, passed in May, that made it easier and cheaper to fire workers.
ÂKid gloves for the strong and an iron fist for the weakÂ
Once again, argued Lara, the governmentÂs approach was Âkid gloves for the strong and an iron fist for the weakÂ.
Lara also tackled the most sensitive issue of all Â the scandalous bailout of SpainÂs banks whose out-of-control speculation on the housing market sparked the countryÂs fall into disgrace.Â A first, 30 billion euros tranche of a 100 billion euro banking welfare cheque has just been agreed with EU leaders, but strings are attached.
Despite claims by Rajoy otherwise, Lara said the bail out deal had ÂstrippedÂ the country of its sovereignty and democracy as the EU was now imposing Âstrict conditionsÂ and a Âfull-scale interventionÂ in the governmentÂs key economic and budgetary decisions.
Fresh protests planned
Trade union centrals Comisiones Obreras andÂ UGT say the Government measures will generate Âmore unemployment and economic recession.Â They have called a joint day of protest on 19 July.