Spanish unions vowed today to fight austerity moves in the courts as the Socialist government said it would introduce a contentious cut in public sector wages through a royal decree, bypassing parliament.
The UGT union, which was already planning a public sector strike on June 8th, said it would contest the legality of such wage cuts at the centre of plans for budget reductions of €15 billion announced last week.
"We are going to challenge the royal decree on wage cuts," Julio Lacuerda, a representative from Spain's second largest union UGT, told a news conference after meeting government officials to receive details of the pay reductions.
"This is a complete mockery of our legal right to bargain," added Enrique Foussoul of Comisiones Obreras (CCOO), Spain's largest union.
A government spokesman said the cuts, including an average 5 per cent wage decrease this year for public sector workers, would be passed by royal decree at a cabinet meeting later today, thereby going straight into Spain's statute books.
The cuts would take effect in pay cheques from June.
"My impression is that the unions want to make noise without calling a general strike, because a general strike would hurt the Socialist government deeply," said Pedro Schwartz, economics professor at the San Pablo University in Madrid.
The CCOO and UGT have called a public sector workers' walkout against the cuts for June 8th and not ruled out further action, including a general strike.
Spain's government announced more spending cuts last week to accelerate a reduction in its budget deficit after the European Union and International Monetary Fund approved €750 billion in emergency funds for weak euro economies.
Traders have fretted that Spain could enter a debt spiral like Greece as it grapples with a budget deficit that swelled to 11.2 per cent of gross domestic product last year. It has promised to cut the deficit to 3 per cent of GDP by 2013.
Last week's measures would aim to speed up the reductions in the budget deficit to 9.3 pe rcent of GDP this year and then to 6 per cent in 2011.
Separately today, Spain sold €3.52 billion in 10-year bonds in what was seen as a well-received bond auction.