Thursday, June 12, 2008

Watch Out For Flying Vegetables

Day four of the transport strike, and the situation is far from clear. On the one hand the government seems to have reached agreement with a majority of the transport federations and also to have cleared the main roads that were being blocked. However, supplies of fresh produce to the main Spanish cities seem to be in danger. Until now most of the supply problems seemed to have been caused by panic buying, rather than lack of availability, but now the strike has started to bite.

The strike has provoked mixed reactions in the Spanish media and blogosphere with much debate about whether it should be called a strike at all or whether it is simply an employers blockade. The “strikers” themselves seem to be a mixture of the self-employed and those who work for a company. Some are obviously struggling in a situation where they find themselves unable to pass on increases in fuel prices to the big companies that hire them. Others are employers who are overtly or covertly supporting the strikers so that they can obtain any benefits achieved. Unable to direct their protest against those directly responsible for rising fuel prices, and unwilling to do so against those who hire them, they instead aim their protest at the government.

However, the government has very little room for manoeuvre on fuel prices, even if it was a good idea to reduce taxes on fuel they cannot reduce them very much without European Union approval. In any case the last thing the government wants to do at the moment is reduce its tax revenue too much as the property crash is already leading to reduced income for the state at a time when they have increased expenditure. So instead they offer limited concessions on social security payments and other issues that mainly affect the self-employed “autonomos”. There are also protests in agriculture and the fishing industry over the same issue and there is no indication that fuel prices are about to come down. All these protests are a reflection of what could be a very long running tussle over who will pay the cost of the increase in oil prices.

Spanish food pricing is as mysterious as many other sectors of the economy. The producer seems to get relatively little, those doing the transport are not doing well out of it, but the end price to the consumer clearly leaves a decent profit in the hands of someone? It looks like the government has opted for a strategy of trying to isolate the more militant strikers by buying off other federations with minor concessions and then acting tougher with those who refuse to accept them. On the agricultural front the gloves really came off in Almeria yesterday, police and the local Hacienda building were pelted with….aubergines and cucumbers!

No comments: