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September 2011, Week 1

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Tue, 6 Sep 2011 21:46:32 -0400
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Italian, Spanish Unions Mobilize Against 'Austerity' Plans

'We are on the edge of the abyss'
 
 By Michele Leridon 
 Agence France-Presse via commondreams.com
 September 6, 2011 

 http://www.commondreams.org/headline/2011/09/06-2
 
 Unions mounted a general strike in Italy and organized mass
 protests in Spain Tuesday as they battled government efforts
 to tackle the debt crisis in two of the eurozone's most
 beleaguered economies.

 People march through downtown Turin, Italy, Tuesday, Sept.
 6, 2011 in the wake of a general strike. A strike by Italy's
 largest labor confederation against austerity measures that
 it says penalizes workers has shut down air, land and sea
 transport and curtailed other public services throughout the
 country. Workers for the state railway, city transit systems
 and ferry services all were on strike. Hospital workers,
 postal employees and bank tellers also were joining in. CGIL
 leader Susanna Camusso led a march through Rome on Tuesday.
 Despite the strike, Italian Prime Minister Silvio
 Berlusconi's government backtracked under market pressure
 and restored measures it had cut from its latest 45.5-
 billion-euro ($65.6-billion) austerity package.

The Italian cabinet late Tuesday also authorized calling a
vote of confidence in parliament over its austerity package
to speed its adoption, citing "the seriousness of the
international financial crisis". That would allow the Italian
Senate to vote on the measures Wednesday.

It announced the plans to impose a wealth tax, raise the VAT
sales tax and introduce new pension reforms amidst a one-day
general strike against the austerity package.

Parts of Italy's public transport network ground to a halt
and major attractions such as the Colosseum in Rome were
closed by the strike as tens of thousands of workers took to
the streets across the country.

"This is a plan the country doesn't deserve," said Susanna
Camusso, head of the largest CGIL union, as she led the main
march in Rome.

And in Spain, whose jobless rate is the highest in the
industrialized world at nearly 21 percent, thousands of
protesters from major unions and leftist groups marched in
Madrid and Barcelona against a constitutional amendment to
ensure that budgets are balanced.

"It sets a cap on the deficit you can have and that always
has an impact on social questions -- education, health," said
57-year-old Labor Union (CCOO) staff member Ana Maria Garcia
in the Spanish capital.

The protests came a day after Europe's stock markets saw
sharp falls in share prices, including by more than three
percent in Italy and Spain, amid growing fears of recession.
There was a slight rally on Tuesday morning, but most markets
ended the day down.

Italy announced the austerity package last month, but its
credibility among investors had been undermined by several
changes the government made in the following weeks.

After Berlusconi met with coalition leaders they announced
the package will again include a wealth tax, raise the VAT
sales tax and make pension reforms.

The government also said it would also adopt balanced budget
rules on Thursday as part of efforts by the embattled
eurozone member to regain the confidence of markets.

A wealth tax of 3.0 percent on revenues above 500,000 euros
was put back into the package on Tuesday, after a tax of 5.0
percent had been cut last week under pressure by Berlusconi.

The VAT sales tax will go up one point to 21 percent,
according to statement issued after the ruling coalition
meeting.

The retirement age for women in the private sector, now at
60, is to rise to 65 years as it is for men beginning in
2014, instead of 2016 as had been planned previously.

The measures should help Italy bring its budget back into
balance in 2013 instead of 2014.

The European Central Bank had to step in last month and buy
tens of billions of eurozone bonds after investors fled
Italian and Spanish debt and sent their borrowing costs to
unsustainable levels.

Apart from the protest in Rome, more than 10,000 were taking
part in an anti-austerity demonstration in Florence, and
marches were under way in Genoa and other towns and cities
across Italy.

"We are on the edge of the abyss, we need responsible
government," said Camusso as a colorful, banner-wielding
column of tens of thousands of workers weaved its way through
Rome.

The eight-hour strike caused major disruption to public
transport, with airlines, trains, buses, and ferries
announcing cancellations and delays.

The strike was also affecting hospitals and postal services.
Schools were unaffected with classes yet to begin for the
year.

In a speech on Tuesday, the head of the World Bank kept up
the pressure on eurozone governments to get their economies
back on track, saying the ECB's bond buy-up would only
provide a certain amount of breathing space.

"We're reaching a key decision point for European leaders,"
Robert Zoellick said.

Italy's struggles to meet its deficit-cutting targets was
cited by Spain for battering market confidence.

"We are very worried because some countries are having a very
bad time and are not meeting their targets -- Greece, Italy
and its adjustment plan which it then went back on within
days," chief government spokesman Jose Blanco told the
Telecinco network.

"That affects the decision of the markets that have to buy
our debt and that is what puts us in a period of a certain
instability."

© 2011 Agence France-Presse

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