Spain is about to experience huge austerity cuts that may prove explosive. On Friday Mariano Rajoy, the prime minister, is set to announce what even he describes as a "very, very austere budget" to reduce the deficit. According to El País, the EU is demanding cuts larger than those of Greece, Ireland or Portugal: "There is no comparable adjustment in [our] economic history," says the paper.CCOO and UGT union officials protest in Madrid on 22 March against labor market changes introduced by the conservatives. (Photograph: Biniam Ghezai/Demotix/Corbis)

As a result of this and recent changes to labor laws, only four months after the new conservative government took power, Spain's two largest unions have called for a general strike on the day before the budget announcement.

On top of €15bn cuts already announced in December, it is estimated Rajoy will cut about another €40bn. Many are expecting drastic cuts to health and education, not least the financial markets, who are waiting to see whether Rajoy will deliver what they require. This is on top of existing cuts to social spending, wage freezes for public employees, and privatizations, in a context where 40 home evictions a day are taking place across the country.

Response to this austerity has already been fierce. Hundreds of thousands protested across the country in February against labor law changes described by the unions as "the most regressive in the history of the [Spanish] democracy". Thursday's general strike will be much larger, seeing hundreds of planes grounded, public transport on a skeleton service, manufacturing at a virtual standstill, and even fresh bread from the bakeries in scant supply.

Polls suggest 30% of employed adults say they will participate, but this figure hides the true size of what the indignados movement is calling the "invisible" strike. With the highest unemployment rate in the developed world – 23% are out of work and 49.9% of those under 30 – there is a vast, invisible precariat of students, temp workers, the unpaid, immigrants and older people, looking for ways to meaningfully participate in and expand the political possibilities of the general strike.

This is the natural constituency of the indignados, who launched the global Occupy movement last summer with their city encampments and an emphasis on openness and direct democracy.

Many have been instrumental in continuing struggles around the Spanish state against what have already been drastic cuts. For instance, the "iaiaflautas" are retirees and grandparents who occupy bank lobbies against bailouts, buses against price hikes, and health departments against cutbacks. Their name is a play on the "perroflautas", Spanish slang for crusty, to show how impossible it is to stereotype those taking part in protests as typical activists.

Meanwhile in Valencia, one of the worst-hit regions, students and schoolchildren took part in recent protests against government cuts that had left their schools without adequate heating, many sitting in blankets in classrooms during the cold. The protests were brutally repressed. The sight of schoolkids being arrested by police galvanised a whole wave of solidarity protests around the country from outraged citizens.

These are only the most visible actions. All over the country small groups of determined everyday acts of resistance are taking place, like the villages where people blockade the highway weekly because their emergency clinic is closing down.

In this context, the general strike will be a kind of creative laboratory for the indignados who will be exploring new ways to exert social pressure. They hold the traditional unions at arm's length but join the dance, calling for participation in what they describe as "a strike for the 99 per cent". Many of the actions on the day will start with activists massing in defence of the homes of those about to be evicted for mortgage default; local indignado assemblies will hold popular lunches in the public squares to draw new people into the discussion.

Few are expecting the unions to win immediate concessions, for there are larger forces at work. The EU will be sending officials in April to make sure Rajoy doesn't back pedal in the wake of the strike. Meanwhile the indignados are building for renewed mobilizations in May, taking part in global day of action for the Occupy movement, and for the struggles beyond. For, as Madrilonia, an indignado blog puts it, "a defensive strike is not enough": ultimately this is a struggle for a new social contract for the 99%.

Katharine Ainger is a British writer, activist and co-editor of the New Internationalist magazine. She believes that releasing all the untold stories in the world might transform it. Half British and half Indian, she grew up between Asia and Europe, and over the years has periodically returned to work with and learn from Asian social movements. She has written for all sorts of outlets from serious broadsheets, to disreputable radical publications. She currently lives on an island in the middle of the Thames. Katharine is co-editor of We Are Everywhere: The Irresistible Rise of Global Anti-Capitalism
 

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