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Spain Miners’ Three-Week Trek Against Cuts Reaches Madrid

July 11, 2012

Spanish Subsidies on the Line as Miners’ March Reaches Madrid

Spanish miners stage an evening protest against government coal-subsidy cuts in Madrid. Photographer: Angel Navarrete/Bloomberg

Secundino Menendez Fernandez, a coalminer with a sunburned face, may represent the biggest threat to Prime Minister Mariano Rajoy’s plan to balance Spain’s books.

Menendez, who usually spends his days 700 meters below ground, arrived in Madrid with about 160 fellow miners after trudging 285 miles (460 kilometers) under the blazing summer sun from the northern region of Asturias. They are protesting Rajoy’s cuts to subsidies that equated to more than 290,000 euros ($356,000) per miner last year. Union leaders aimed to draw more than 100,000 protesters to a rally in the capital.

The demonstration tests Rajoy’s attempt to maintain order as he pushes through the most severe budget cuts since the country returned to democracy 35 years ago. The run-up to the demonstration has been marked by violent clashes between armored police and masked pickets who blocked highways and railroads in northern Spain and shot fireworks and golf balls from improvised launchers made from metal pipes.

“The miners will start to matter to investors if the protests turn violent and they block the ability of government to continue implementing reforms,” Antonio Barroso, a political analyst at Eurasia Group in London, said in a July 9 telephone interview. “The government can’t afford a huge protest that shuts down the country.”

Yield Spread

The extra yield investors demand to hold Spanish 10-year bonds instead of benchmark German bunds slid to 546 basis points at 11 a.m. in Madrid today. It reached a euro-era record of 589 basis points on June 18. Rajoy addressed the Spanish parliament today, setting out 65 billion euros of additional budget cuts to meet deficit goals as revenue slumps.

Miners from the mountainous region of Asturias on Spain’s north coast have played a key role in political unrest since before the civil war. General Francisco Franco, who went on to rule Spain from 1939, put down a 1934 uprising by bombing mining communities from the air and faced additional strikes over the course of his 36-year regime.

“The first uprisings were always in the mining counties,” said Menendez, 53, who hails from a family of Asturian miners going back at least five generations. “We were in the vanguard for the protests of the whole society and history is repeating itself today.”

Former Prime Minister Jose Luis Rodriguez Zapatero, from Leon, another northern mining area, last year budgeted 1.2 billion euros of aid for the coal industry, the most-polluting energy source, even as he touted Spain as a leader in low-carbon power. Zapatero has committed Spaniards to paying over 100 billion euros in subsidies for renewable energy.

Long March

For the past three weeks, the marchers have snaked along the edge of highways from the northern regions of Asturias and Leon, raising clenched fists to salute truckers that hoot their support and camping in sports halls opened up by friendly mayors. On their helmets, supporters scrawled messages of good luck and they’ve taped photos of their kids. By early July, some were hobbling as villagers turned out to cheer them.

“We’re here to look after our Spaniards,” said Julia Alonso, a Red Cross worker from Avila province who gave pain- killing injections to some before the start of the July 6 leg.

The police forces waiting for them in Madrid aren’t as welcoming. They are prepared for violence even as they aim to contain protestors peacefully, according to an interior ministry official who declined to give details of police numbers for security reasons.

Improvised Artillery

When the miners last gathered in Madrid in May, police charged demonstrators with batons and fired rubber balls into the crowd after a protester shot a firework at the Industry Ministry using a home-made rocket launcher, union organizer Jose Luis Fernandez Roces said as he rested in the shade following a 24-kilometer leg on July 5. Last week, a golf ball fired from a similar weapon pierced the armor of a police van during a clash with authorities in northern Spain, he added.

The police will have enough officers in reserve to control the protesters should they try to storm the parliament building where lawmakers are meeting today, the official said. Protesters in the north, who cover their faces to conceal their identities, have fired home-made missiles at a police helicopter, he added.

“The mining industry is traditionally very combative because the work itself is very tough,” Justo Rodriguez Braga, general secretary of the Union General de Trabajadores in Asturias said in a July 6 interview on the highway near Segovia. “While the workers are peaceful, we are concerned the situation could lead to violence and social instability.”

Fighting Rajoy

Today’s demonstration has taken on a wider significance for the miners, who usually retire in their early 40s under an industry-wide labor agreement funded by the state. They see their campaign as part of a wider battle to protect workers and the unemployed as Rajoy cuts spending to try to hit his budget- deficit target and prop up the banking industry.

“The government wants to destroy the country’s most powerful union movement,” Roces said. “They say they are cutting aid because of the crisis but then they find 100 billion euros for the banks. We are talking about 200 million euros.”

Industry Minister Jose Manuel Soria, the object of abusive chants from the marchers, cut the aid budget for the mining industry 44 percent this year to 656 million euros. That includes 193 million euros to compensate companies whose production costs exceed the market price of coal.

Miners’ leaders say Soria is distorting those numbers because they include payments that come from the 2011 budget. Aid to companies in this year’s budget was cut to 111 million euros from 301 million euros in 2011, according to the Comisiones Obreras union. The subsidy cuts are steep enough to drive most mine operators out of business, Rodriguez Braga said.

“We aren’t fighting for an extra week’s holiday or a 2 percent pay rise, we’re fighting to keep an industry alive,” he said. “I’m expecting a massive turnout from the people.”

To contact the reporters on this story: Ben Sills in Madrid at bsills@bloomberg.net

To contact the editor responsible for this story: James Hertling at jhertling@bloomberg.net


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