Thousands of public schoolteachers went on strike Tuesday in Madrid to protest staff cuts as anger over government austerity measures spread to Spain’s education system.
Meanwhile, Greek authorities, in a bid to prevent a potentially disastrous default, aimed to persuade international creditors that their debt-ridden country will meet the strict budget targets required to keep getting rescue loans.
And Italy criticized Standard & Poor’s for downgrading its credit rating, saying the decision seemed politically motivated and out of touch with reality at a time when the government is working to boost growth and reduce its debts.
Tuesday’s events reflected growing concern about Europe’s financial crisis.
In Madrid, the teachers strike in some 300 schools is to last at least two days and perhaps three. Teachers elsewhere in the country also plan strikes or protests this month against budget cuts. Elementary schools were not affected.
Teachers say education should be spared as Spain tightens its belt to resurrect its economy, allay fears it might need an international bailout and reinvent itself for the future with an educated workforce.
Education in Spain largely is run by regional governments, many of which are debt-laden. Madrid’s regional government hopes to save $110 million with staffing cuts. It and others making budget cuts are mostly run by the conservative Popular Party.
The central government of Socialist Prime Minister Jose Luis Rodriguez Zapatero, which has enacted austerity measures of its own, opposes education cuts.
In Greece, markets were fairly hopeful the country will receive the next $10.9 billion installment of its bailout, without which the country would go bankrupt next month, plunging Europe’s banking system into turmoil.
Talks were set to be held Tuesday by teleconference with Finance Minister Evangelos Venizelos and officials from the European Commission, International Monetary Fund and European Central Bank, collectively known as “the troika.”
Though stocks were up on expectations some deal would be struck, most analysts said the country will have to restructure its debts at some point, especially if the economy remains mired in recession.
Fitch Ratings said in a report Tuesday that it expects Greece to default eventually, doing so while remaining in the eurozone.
Late Monday, S&P cut Italy’s credit rating by one notch to A from A+ in light of what it sees as that country’s weakening economic growth prospects and higher-than-expected levels of government debt.
S&P said it believes Italy is vulnerable to heightened risks, citing Prime Minister Silvio Berlusconi’s “fragile” coalition and institutional deadlocks that have blocked reforms.
Mr. Berlusconi’s office responded by saying the evaluation “seems dictated more by behind-the-scenes reports in newspapers than reality and seems contaminated by political considerations.”
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