The “rebalancing” in Spain continues along the lines I have suggested, not as suggested by economists and those who think there is guaranteed future of the eurozone.
Via Google translate from El Economista, please consider Strike by Iberia Starts Monday
The nearly 20,000 workers are called from Iberia to strike on Monday in the first week of the 15 days of strikes called by unions CCOO, Asetma, USE, SITCPLA and CTA-Flight, which has forced airlines group to cancel a total of 1,222 flights in its first five days.
The 24-hour strikes, affecting ground staff and cabin crew (TCP), but which are called all employees of the airline, will be held from Monday 18 to Friday 22 February, from Monday 4 to Friday 8 March and Monday 18 (a public holiday in some ACs) to 22 next month. The pilots’ union will join the strike in March.
Furthermore, the six unions representing 93% of the staff have organized concentrations for 18 and 22 February in all Spanish airports, coinciding with the start of the 15-day strike.
The Minister of Development, Ana Pastor, reiterated on Friday to unions and the management of Iberia make an “effort” to avoid the strike.
At a meeting in Development with representatives of both sides, Pastor said the government has “no authority” to intervene in the management of a private company, but said he does have the “legal obligation” and “direct responsibility” for ensuring connectivity in Spain, so it would intervene in the event that gave a “serious disruption of transportation”, as it has done on other occasions.
Iberia has insisted that the 15-day strike “worsen” the situation of the company, so it has appealed to the groups to call off the strikes, considering that they only hurt customers, reputation and all his employed.
The airline has launched a contingency plan to cater to all passengers during the strike days and has flexible rates to facilitate the exchange or refund.
It has also reached agreements to protect customers with other airlines in order to have more choices, and has taken shape that has agreements with Oneworld alliance members, along with about a dozen companies.
Travelers concerned may Serviberia phone call 902 400 500 or 900 100 480 in Spain to change your flight or request a refund if the change is not interested.
Rebalancing the German Way Cannot Work
I am not taking the side of the union. Rather, I am pointing out that rebalancing the German way, by forcing still higher unemployment in Spain cannot and will not work.
At some point, and quite frankly I would have expected it by now, there is going to be mass resistance to efforts to balance the budget and productivity differences on the backs of workers.
Spanish Debt Grows by €146 Billion
I like working with Doug Short at Advisor Perspectives. He took my post Spanish Debt Grows by €146 Billion, Largest Ever Recorded; Debt-to-GDP Highest Since 1910 and added a couple of charts to it, stating in an email “I couldn’t resist adding a postscript”.
Here are the charts and commentary from Doug Short’s reposting of Spanish Debt Grows by €146 Billion
Postscript from dshort: Here is an updated chart that I last posted about ten months ago highlighting the disconnect between the S&P; 500 and Spain’s IBEX 35. Fed policy has certainly been more successful in boosting US equities than the various strategies in Spain despite EU support. The divergence starts at approximately the date of Chairman Bernanke’s speech at the Fed’s 2010 annual symposium in Jackson Hole, Wyoming (August 27, 2010). Bernanke strongly hinted at the forthcoming Federal Reserve intervention that was subsequently initiated in November of 2010, namely, the second round of quantitative easing, aka QE2.
click on chart for sharper image
Here is a closer look at the correlation between the S&P; 500 and Fed policy.
click on chart for sharper image
Rebalancing the Hard Way
Unemployment in Spain is over 26%. Youth unemployment is over 50%. Spain’s budget deficit is still large and growing even though taxes have increased.
Rebalancing the German Way (the hard way), will require still higher levels of unemployment and still lower wages, perhaps for a decade.
I suggest the patience of the Spanish population cannot possibly last that long.
Mike “Mish” Shedlock