HispanicBusiness

Hundreds of Spanish public workers on Friday demonstrated in Madrid against government spending cuts, while trade unions threatened to stage strikes and to take legal action against the measures.

Similar rallies have been called around the country. They followed other demonstrations, the largest of which brought an estimated 4,000 people to the streets in Madrid earlier this week. Unions have called nationwide protests for July 19.

Prime Minister Mariano Rajoy's conservative government is facing growing social unrest over the budget cuts, regarded as the toughest in the country's recent history, which amount to 65 billion euros (79 billion dollars) over the next two and a half years.

They include scrapping civil servants' Christmas bonuses and tax rebates for mortgage holders, a rise in value added tax and a reduction in unemployment benefits.

The government is trying to trim the budget deficit from 8.9 per cent of gross domestic product in 2011 to 6.3 per cent this year and to 2.8 per cent by 2014, as agreed with the European Union.

The government was having trouble imposing fiscal discipline on Spain's 17 semi-autonomous regions, which are responsible for a large part of the deficit, the daily El Pais reported.

Six of the regions were protesting against the 1.5-per-cent deficit limit the government was imposing on them, according to the daily. They wanted the government to relax that target, arguing that the EU had also relaxed its 5.3-per-cent target for all of Spain.