The focus of the European financial crisis has shifted from Greece to Spain. So today Spain had its first austerity budget-induced street protests. Government workers held a one-day walkout. They're protesting a plan to shrink the budget deficit, a cornerstone of which is a 5 percent cut in public-sector pay. Today's strike wasn't quite as widely supported as the unions probably hoped, but there's still time.

By Stephen Beard

With horns blaring and banners fluttering, the protest felt more like a carnival. But the anger was clear. The strikers -- most of them government office workers -- said they were bearing the brunt of the budget cuts.

"They're going to cut our salaries," said one striker. "I mean, you're going to earn less and less for the same time and for the same effort. We think it's unfair."

The public sector workers feel particularly aggrieved, because Spain's biggest problem is not public debt -- but the gigantic debt load in the private sector, following Europe's biggest construction boom and bust.

"What you had is too much lending to developers. Most of these developer companies are in fact broke," said Pedro Schwartz of San Pablo University.

As a result, Spanish banks are encumbered with a mountain of bad debt. And, says Schwartz, international investors have been worrying that this may pretty soon wind up on the government's books.

"That is one of the laws of nature: When you have too much private debt, in the end, the government picks up the tab," said Schwartz.

The striking workers may soon have another bone of contention: The government is under pressure to revive the stagnating economy and tackle unemployment. At 20 percent, it's the highest in the Eurozone.

Tomorrow, the government presents its plan for labor reform -- making it easier to fire and then hire workers. The unions say they won't see workers' rights dismantled. They are ready to call a general strike.