Energy prices: wave of protests against rising prices in Spain is slowing recovery | Economy and business
Following the crisis caused by the coronavirus, the Spanish economy is expected to show two years of strong growth that will bring it back to pre-pandemic levels. And the foundations seem stronger today than after the previous financial crisis: the labor market has 20 million people in employment for the first time since 2008; The European Union has rolled out a stimulus package that is expected to bring 70 billion euros to Spain, and interest payments are falling despite growing debt thanks to the European Central Bank’s bond purchase program .
But that’s where the good news ends. According to Brussels, Spain is the only country in the EU where economic activity will not return to pre-pandemic levels until 2023. Meanwhile, energy and supply chain crises are affecting citizens and pushing inflation to levels not seen since 1992.
The recovery seems to be upon us just as people’s patience has reached its limit amid a mix of different realities and expectations. It takes the form of growing unrest in the streets: truck drivers have called a three-day strike over Christmas to complain about rising diesel prices; the metallurgists of Cadiz erected barricades in the streets to protest against the peaks of inflation which reduced their wages; autoworkers called a protest in Madrid on Monday against plant closures caused by shortages of car chips; consumer associations have already organized several marches against rising electricity bills, and even hairdressers have staged sit-ins demanding lower VAT rates. The common thread is the rising cost of living and, for the self-employed, running a business.
Truck driver strikes
A three-day strike by truckers was called on December 20, 21 and 22, in the midst of a key sales campaign. The fact that the shutdown was announced well in advance, however, indicates that there will be enough time for industry officials to sit down with government officials and strike a deal to prevent a decision. which would be ruinous for businesses.
Carriers will file several complaints, including the introduction of the Eurovignette, a road toll system, in several European countries; the need for secure rest areas, and above all the sharp rise in fuel prices. Only the large transport companies manage to pass on this cost through higher tariffs. As for independent drivers, the majority, they pay the highest price without any compensatory measure.
A perfect storm in the automotive industry
The Spanish union CC OO was planning a demonstration on Monday in front of the Ministry of Industry in Madrid. Union leaders said they wanted action against “the perfect storm” affecting the auto sector, which contributes around 11% of Spain’s gross domestic product (GDP). It is a message similar to that conveyed by Anfac, the association of the automotive industry. “We all have the same issues as the rest of the industry, plus the added technological and regulatory pressure to change products and manufacturing plants,” said Anfac Managing Director José López-Tafall.
Cadiz: Ground Zero for metalworkers
Before the coronavirus crisis hit, the economically depressed city of Cadiz, on the southwest coast of Spain, was already suffering from low-income jobs and unemployment much higher than the Spanish average: 23, 16% versus 14.57% according to the latest EPA workforce survey. The new unfavorable conditions have ignited the historically combative metal industry, where 30,000 employees from 6,000 companies, according to industry estimates, went on indefinite strike a week ago. There were scenes of fury when barricades were set on fire and riot police were dispatched to quell protests as traffic slowed in Cadiz and the surrounding area of Campo de Gibraltar.
Unions want rising inflation reflected in their wages, while industry executives say companies can’t handle such a raise and instead are proposing 2% wage increases over the next three years. The conflict could be a sign of things to come in other sectors of the Spanish economy.
Soaring electricity prices
Consumer groups have been organizing small protests for months, but the problem of rising electricity bills has now escalated to the point that dozens of associations and around 1,800 people have turned up for a march in Barcelona there. about two weeks ago. While not a huge number, it is enough to worry the government because of the potential of the issue to create widespread citizen dissatisfaction.
So far, executive tax cuts have been met with price hikes in global markets for natural gas and carbon dioxide emissions. In Spain, electricity prices for households in October were 63% higher than a year earlier, according to the National Institute of Statistics (INE). And even energy-intensive industries that benefit from other types of contracts have noticed the rise and have warned the government that unless it offsets these costs, many small businesses are at risk of going bankrupt. Sidenor, a metallurgical company in the Basque Country, announced last month that it was shutting down its Basauri plant for 20 days due to soaring energy costs.
Farmers grappling with production costs
Rural Spain takes up arms again. After demonstrating in the streets of several regional capitals in early 2020 against the low prices that intermediaries pay for their products, producers and breeders are planning new markets in December. “The increases have been brutal and they affect everything,” said Miguel Padilla, secretary general of COAG, Spain’s largest industrial association.
Production costs have increased in all parameters of agricultural and livestock operations over the past year: electricity has increased by 270%, diesel in tractors by 73%, fertilizers by 48%, water by 33% and seeds by 20%, according to industry data. . And while consumers are paying more to reflect these increases, producers haven’t seen a similar increase in what they get paid by middlemen. “There needs to be a more equitable distribution of the value of goods in the food chain,” said Padilla.
Although no date has been set for the protests, industry leaders have said some of them may coincide with transport strikes between December 20 and December 22.
In the northwestern region of Galicia, which produces 40% of Spanish milk, dairy farmers say they are “strangled” by soaring production costs. The union Unións Agrarias estimated this increase at 25%. Representatives from Agromuralla, a group that organized tractor protest rallies around Lugo’s city wall, said they now pay twice as much for electricity. Dairy farmers note that supermarket customers pay more for their cartons of milk while they themselves are paid the same, while incurring higher production expenses. “All we ask is respect for the law on the food chain, which states that no link in the chain can charge less than what it costs to produce,” said Félix Porto d ‘ Unións Agrarias.
With pension reform high on the government’s agenda, pensioner groups are trying to have their say in ongoing discussions with unions and professional associations. There is a preliminary deal to tie pension checks to inflation, but these groups are now trying to extend protection further and are calling for public protests to back their demands.
There have been marches in the Basque city of Bilbao over the past three years to demand a minimum monthly payment of € 1,080 and for the repeal of reforms introduced between 2011 and 2014. The most recent protest, which was also the most important to date, took place in Madrid last Saturday. The leaders of the protest also demanded that the retirement age be set again at 65, against 66 for people who have contributed less than 37 years and three months to the social security system.