Spain faces general strike amid budget pressure

Flights and other services in Spain face disruption Thursday in a general strike against labour reforms and spending cuts that the conservative government says are needed to save the economy.

It is the first major strike against Prime Minister Mariano Rajoy's policies, just three months after he took office promising to cut Spain's 23-percent unemployment rate and stabilise its public finances.

The national strike comes a day before the government unveils its 2012 budget, raising the heat on Rajoy who also faces pressure from European leaders fearful of financial contagion in the eurozone.

"This is a just response to a brutal reform of our system of labour relations," said Ignacio Fernandez Toxo, leader of the CCOO, which is one of the two main trade unions in Spain along with the UGT.

Under an agreement between the government and these two unions, at least a minimum service of a third of local trains and buses is due to run, with one in 10 domestic and one in five European flights.

Airlines Iberia, Air Nostrum and Vueling have cancelled about 200 flights each from Spanish airports.

A minimum service is also planned in hospitals while schools and nurseries are due to open.

The government and unions were due to give estimates on Thursday for the level of participation in the strike, which could be lessened by workers' reluctance to lose a day's salary during tough economic times.

The last general strike in September 2010 was judged to have had a limited impact.

Street demonstrations have also been called Thursday, mostly for the evening when many people will have finished work. They may be swelled by students who have vowed to join in.

Rajoy defended his measures, including the labour reform which makes it easier for firms to hire and fire and cuts severance pay for laid-off workers. He says it will eventually generate more jobs.

"No government has passed as many reforms in its first 100 days in office as this one," Rajoy said on Tuesday, speaking in Seoul.

"That's probably why there is a general strike," but it "will not solve Spain's problems", he added.

"The biggest mistake would be to do nothing."

Rajoy, under pressure from European leaders to cut Spain's public deficit and avert further financial instability in the eurozone, warned he would unveil "a very austere budget" on Friday.

It will cut government ministries' budgets by about 15 percent, he said.

But ruled out measures affecting consumption such as a rise in the sales tax.

"We will open a new chapter of reforms as important as those we have made so far, which will mainly affect public services and administration, the electricity sector, and so on," he said.

Also on Friday, eurozone finance ministers will be meeting in Copenhagen with a focus on Spain's deficit plans.

Spain this month agreed with EU leaders to cut the shortfall to 5.3 percent of gross domestic product this year -- still well above the previous target of 4.4 percent.

Rajoy has so far this year confirmed 8.9 billion euros' worth of spending cuts and 6.3 billion euros in tax rises, but economists say total cuts worth more than 50 billion euros are needed.

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