Anti-Austerity Protests Sweep Europe, Sparking Violence; Brussels Blinks, No Further Austerity for Spain; Economic Burnt Toast

A wave of protests swept across Europe today. Two-thirds of Spain's commuter trains were shut down. In Portugal, buses and trains were suspended across the country. Italy, Greece, and Belgium also saw major protests.

Please consider Der Spiegel report Anti-Austerity Protests Spark Violence

Millions of Europeans joined together in general strikes and demonstrations on Wednesday to protest the strict austerity measures undertaken by their countries. In Portugal and Spain, hard hit by the debt crisis, locals conducted a 24-hour general strike that largely paralyzed public infrastructure, suspending train service and grounding hundreds of flights, in addition to shutting down factories.

Most of the protests remained peaceful, but in Madrid there were some violent clashes between demonstrators and police.

Officials warned the situation could escalate further on Wednesday night, with major protests planned for Madrid and Barcelona. A similar demonstration had also been planned for Portugal's capital city, Lisbon.

Spain: Only one-fifth of long-distance trains ran on Wednesday, and more than two-thirds of commuter train services were cancelled. The strikes also paralyzed airlines, with national carrier Iberia and low-cost company Vueling forced to cancel numerous flights.

Portugal: In Lisbon, subway service ceased. Bus and train service was suspended all across the country. Workers at post offices and schools also went on strike. At hospitals, up to 90 percent of workers walked out for the day.

Italy: The country's biggest union, CGIL, called a four-hour general strike and organized around 100 rallies. In Rome, police clashed with students who threw stones and unsuccessfully tried to rush the government palace. In Turin, protesters threw eggs and smoke bombs at the offices of the local tax authorities. Meanwhile, in Milan, rioting students smashed in windows of banks and the energy company Enel.

Greece: Unions had prepared a protest that ended outside the parliament building. The protests began in the city center on Wednesday morning, with police expecting a relatively modest turnout, after a two-day general strike against the latest austerity measures passed by parliament already took place last week.

Belgium: Rail traffic was affected by workers' strikes, with trains traveling to Brussels hardest hit. German national railway Deutsche Bahn provided a replacement bus service for its high-speed services between Brussels and Cologne. Meanwhile, Thalys, which offers high-speed trains between Paris, Brussels and Cologne, suspended service on the route for the day. "Unless a journey is unavoidable, passengers are advised not to travel today," said a rail spokesperson.

Brussels Blinks, No Further Austerity for Spain

There is nothing like a massive wave of protests to get bureaucrats to blink, and blink the nannycrats in Brussels did.

Please consider No further austerity for Spain, says Rehn

Spain will need no further austerity measures until the end of next year even though it will easily miss its deficit targets, the EU?s top economic official announced on Wednesday in the clearest sign yet Brussels is backing away from an austerity-focused crisis response.

The decision, approved by the full European Commission on Wednesday, came on a day that anti-austerity demonstrations by labour unions gripped capitals in several struggling eurozone countries, particularly Spain and Portugal, where schools closed, public transport was brought to a stop and air travel was disrupted.

Mr Rehn cautioned against reading the decision as a eurozone-wide shift in policy, saying Brussels would need to ?look at every country case by case?. He added that Spain must still do more in 2014, when Madrid is required to get its budget deficit, which was 11 per cent of gross domestic product at the end of last year, down below the EU threshold of 3 per cent.

Vice-Liar-in-Chief

Olli Rehn, EU economic commissioner is clearly singing the tune of "Liar-in-Chief" Jean-Claude Juncker, chair of the eurogroup of finance ministers who once publicly stated "When it Becomes Serious, You Have to Lie".

Economic Burnt Toast

Rehn is lying through his teeth. The decision regarding Spain is a clear shift in policy.

However, it will not matter one iota. Spain and Greece are economic burnt toast. Neither country can possibly survive in the eurozone.

What can't happen, won't. All that remains to be seen is how disorderly the breakup will be.

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com

Mike "Mish" Shedlock is a registered investment advisor representative for SitkaPacific Capital Management. Sitka Pacific is an asset management firm whose goal is strong performance and low volatility, regardless of market direction. Visit http://www.sitkapacific.com/account_management.html to learn more about wealth management and capital preservation strategies of Sitka Pacific.

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