Parts Of Spanish Economy Grind To A Halt After Five-Day Nationwide Truckers’ Strike
March 19, 2022 | Tags: ZEROHEDGEParts Of Spanish Economy Grind To A Halt After Five-Day Nationwide Truckers' Strike
Like the Trudeau government, Pedro Sánchez’s ruling coalition blames the truckers’ strike on far-right elements while blaming Putin for record-high gas prices and decades-high inflation in Spain.
Spain’s already struggling economy is in a bind after an indefinite strike by truck drivers has brought a number of key industries to a halt. Called by the Platform for the Defense of Road Transport of Merchandise, the strike began on Monday and is being followed by an estimated 85% of smaller truck companies and self-employed truckers. They are protesting surging fuel prices, unfair competition by larger companies and poor working conditions.
By Trending Stock News ReportLarge logistics hubs such as Mercamadrid have been operating at half capacity for the past three days, with a drop of as much as 60% in the arrival of products such as fruit, vegetables, fish and shellfish. In Catalonia, where I’m writing this from, the problems seem to be less pronounced. Barcelona’s wholesale market Mercabarna has been receiving 11% less fish and 33% less vegetables, in particular eggplant, zucchini and peppers. As one might expect, panic buying has also exacerbated the shortages.
The main flashpoints are in southern and northern parts of the country, in regions such as Galicia and Andalusia. Some Cantabrian fishing fleets announced on Tuesday that they would halt their activity altogether as there was no way of guaranteeing that their haul would make it to market. The same is happening with fruit growers in the south of Spain. On Wednesday afternoon, the dairy industry confirmed that it will stop working as of Thursday because it cannot supply itself or distribute its products.
Some factories have also been forced to close due to a shortage of components. They include a sugar refinery belonging to Azucarera in Jerez de la Frontera and two steel manufacturing plants, one belonging to Arcelor Mittal in Asturias and the other to Acerinox in Los Barrios (Cádiz). An Opel factory in Zaragoza has also stopped its Line 1, where the Citroën C3 Aircross and the Opel Crossland are assembled, due to supply problems.
Ports have also been hit hard, as wsws reports:
Throughout Spain, major ports are not fully functioning. The port of Bilbao, one of the main entry points in northern Spain, is paralysed. “By road, no commodity is leaving the port of Bilbao, no one works in Santurtzi, the port is stopped 100 percent. No truck is loading,” a spokesperson for the Association of Self-Employed Carriers of the port of Bilbao told news agency EFE.
In Algeciras port, one of the world’s busiest transshipment hubs, the Algeciras Bay Container Transport Association, with a fleet of 1,000 trucks, is supporting the strike.
Pickets have taken place outside key logistics hubs, preventing non-striking truckers from reaching their pickup point. In some places violence has erupted. According to El Mundo, 1,700 trucks had already been vandalized by Thursday afternoon. At a picket line in the industrial zone in San Fernando de Henares, Madrid, two strikers were reportedly injured, one seriously, after an undercover policeman opened fire when one of them resisted arrest. The striker, aged 33, was rushed to hospital in serious condition with a gunshot wound to his abdomen.
The Sánchez government has responded to the crisis by bolstering security at logistics centers across Spain and reinforcing police units on the country’s road network to guarantee the supply of essential goods and the right to work of carriers who do not support the strike. In total, the Government has deployed 24,000 additional police officers.
It is also following the by now dog-eared script of painting all the protestors as far-right agitators. It is the same playbook used by the Trudeau government in Canada against the so-called freedom truckers, as well as the governments of France, Germany, Austria and Italy against the anti-vaccine passport movements in their respective countries.
Sánchez has referred to the members of the Platform for the Defense of Road Transport of Merchandise as “ultras who are replacing the spoken word with sticks, nails and stones.” According to the Minister of Transport, Mobility and Urban Agenda, Raquel Sánchez, the strike is not having much impact while “it is quite clear” that Spain’s resurgent far-right political party VOX is behind the movement.
The organizers behind the platform deny the allegations. But Spain’s far-right party VOX is lending its support to the movement. Whether this is out of pure political opportunism on the part of VOX or something more sinister is at work is hard to ascertain. Support for VOX, which has already participated in a number of coalition governments at the city and regional level, is on the rise while support for the PSOE’s junior partner in government, PODEMOS, is on the decline. As economic conditions deteriorate in Spain, the chances of a right-wing coalition including VOX winning the next elections, in 2023, will grow.
One thing that is clear is that the strikers have plenty of justifiable grievances, the most notable of which are record-high petrol prices and decades-high inflation. The trucker industry is exceptionally vulnerable to sharp rises in fuel prices. At many gas stations gasoline prices have already crossed the 2 euros a liter threshold. In February, the consumer price index in Spain clocked in at 7.6%, the highest level in 33 years and higher than just about any other Western European country with the exception of Belgium.
Blaming Putin for Everything
Sánchez recently took a leaf out of Joe Biden and Nancy Pelosi’s book by trying to pin all the blame for surging energy prices on Russia’s invasion of Ukraine. “We have to tell the truth and not confuse citizens. Inflation and rising energy prices are the sole responsibility of Vladimir Putin and his illegal war in Ukraine,” he told parliament.
It is a desperate, intelligence-insulting ruse and as far as I can tell most people are not buying it. As the graph below (courtesy of Trading Economics) shows, Spain’s consumer price index CPI has been rising steadily since early 2021, a full year before Russia’s invasion of Ukraine:
The PSOE-Podemos government is also escalating the use of violence against striking truckers, just months after deploying armored cars and rubber bullet-firing police squads against striking metalworkers in Cadiz.
The truckers are not just riled about rising fuel prices. As one trucker told me, freelance drivers just can’t compete with the larger companies, which can stockpile fuel and get big discounts on spare parts. Meanwhile the freelancers and smaller companies pay full whack. This allows larger companies to offer lower rates, pricing smaller companies out of the market. Here’s a brief selection of some of the truckers’ other demands:
A blanket prohibition of the contracting of good transport services (by road) at below operating costs. This is to try to prevent larger companies from pricing smaller operators out of the market.
Limit the subcontracting of the transportation contracts to a single contractor. Establish direct liability to the main shipper in case of non-payment of services to the carrier, giving arbitration boards the legal capacity to exercise direct action against the main shipper.
Maximum payment term of 30 days for transportation services, by law.
Prohibition by law of the loading and unloading by truck owner operators and freelancers who drive their vehicles.
A new law requiring and limiting the loading and unloading of trucks to a maximum time of 1 hour from arrival, or from the agreed time.
Legislation prohibiting large road haulage companies from hiring bogus self employed workers (i.e. workers who only work for one company but are treated as freelancers) to drive their trucks.
Construction of new rest areas that cater to the current flow of vehicles throughout the road network. It is inadmissible that sanctions are being imposed for exceeding driving times, when the reason for said excess is motivated by the lack of safe places to take breaks.
Small businesses and self-employed workers, not just in Spain but across advanced economies, have been at the sharp end of the economic impact of the lockdowns and their myriad knock-on effects. Now, their margins are being squeezed ever tighter by rising inflation while procuring many basic goods is becoming more and more difficult. The story differs from country to country, depending on the extent to which the government in place has supported small businesses and the self-employed through the lockdowns.
In Spain, the support was minimal and largely consisted of emergency loans. According to a recent report by the Bank of Spain, more than a third of self-employed workers lost 46% of their earnings during the first year of the pandemic and had only managed to recoup 17% of those earnings by November 2021. Earnings for small businesses, many of them in the tourism and hospitality sector, slumped by €60 billion in 2020 due to the pandemic.
Many small businesses have had to take on new debt just to weather the lockdowns and now face an uphill climb trying to pay it all back. It’s a similar story in the UK, where a third of small businesses are now classed as highly indebted, more than twice the number before the COVID-19 pandemic, according to the Bank of England.
To compound matters, many governments are beginning to hike taxes or social security on small businesses and self-employed workers. In Spain, any self-employed worker earning more than €1,100 a month will soon have to pay a lot more in social security contributions.
This is the crux: as prices of energy and basic goods surge into the stratosphere, cash-starved governments are increasing taxes and/or social security contributions for many self employed workers and small businesses. For many, it could be the final straw.