Millennium Post

Protests rock Spain again as bailout spectre returns to haunt

Thousands of protestors rallied near the Spanish parliament for a second straight night after a rough day on the markets again raised the spectre of a full bailout and deeper economic pain.

Shouting ‘Government resign!’ and ‘We are not afraid’, demonstrators faced off against riot police in the Plaza de Neptunon yesterday, the same area of Madrid where officers beat protestors and fired rubber bullets to disperse them Tuesday night.

‘I came yesterday and I’ll come every day to say no to this system,’ said Angel Alcaide, a 30-year-old engineer, who carried a sign reading ‘Resign’.

‘This government is worse than the last. It protects its privileges, its luxuries, and the people just get cuts in health and education,’ said 26-year-old Carmen Lopez, who lives in London – pushed abroad, she said, by the lack of jobs for young people.

But mass protests seemed the least of Prime Minister Mariano Rajoy’s problems as the prospect of an international rescue revived.

Spain’s borrowing costs crept back up to danger levels and the stock market plunged on Wednesday, as pressure from Catalonia, which called snap elections in a drive for greater independence, added to the gloom.

The government is due to pass its 2013 austerity budget on Thursday, with US$50 billion in savings, including an anticipated third straight year of salary freezes for civil servants.

On Friday, the government is due to unveil an independent audit of its stricken banks to determine how much capital is needed to reinforce them from further shocks.

The budget and audit ‘could potentially boost sentiment towards Spain and pave the way for a bailout deal to be agreed’, analysts at Capital Economics said in a note. ‘But Spain will still be left with a number of other major problems’ in meeting its fiscal targets, securing its banks and fielding pressure from Catalonia, they added.

Before deciding whether to ask for a bailout, Rajoy insists on knowing what conditions European authorities would attach, apprehensive of having economic cuts dictated to him.


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