SPANISH POLICE clashed with and arrested demonstrators last evening as thousands surrounded the parliament building in Madrid to protest against the government ahead of a crucial few days for the economy.

The protesters, who staged popular assemblies and rallies across the capital throughout the day, were angry at government economic policy, although the day’s actions were directed at Spain’s political class as a whole.

Although most of the day passed without major incidents, as the demonstration approached its climax outside the Congress building in the evening, there were clashes with police and arrests.

“The problem Spanish people have is that we don’t know what’s going on, and we don’t participate in the running of the country,” said Laura Matos, a young lawyer who gathered with hundreds of other protesters for a popular assembly opposite the Prado art museum in the afternoon.

“The only way we participate is by having to put up with cuts to areas such as healthcare and education.”

The “Occupy Congress” protest was led by two new social organisations, and was backed by dozens of other, mainly left-leaning groups. The build-up to the day’s actions was tense, due in great part to the organisers’ stated aim of pressuring the government to step down and Congress to dissolve.

However, about 1,400 police were deployed to Congress and the area around the building was cordoned off throughout the day.

María Dolores de Cospedal, the deputy leader of the governing Partido Popular, on Monday criticised the planned protest as undemocratic. “The last time I remember Congress being surrounded was when there was an attempted coup d’état,” she said, in reference to Spain’s failed putsch of 1981.

This comparison of current demonstrators with pro-Franco rebels from a dark episode in Spain’s past drew harsh criticism from other political parties.

Spain is in a double-dip recession and has Europe’s highest jobless rate at 25 per cent. The conservative government has embarked on a severe austerity programme in an effort to meet EU targets and slash the deficit.

“This government is leading us towards an economic dictatorship,” said telecoms technician Guillermo Ruiz, who was standing within view of Congress behind a makeshift fence erected by the police as the protest got under way. “We need these incompetent people to resign.”

The government of Mariano Rajoy is expected to unveil the proposed 2013 budget tomorrow, along with a raft of structural reforms. Although few details are available, many believe the measures announced will have the blessing of Brussels and will pave the way for a possible sovereign bailout for Spain.

Details of audits carried out on Spain’s banking sector are to be released on Friday. In June, Spain requested a rescue package of up to €100 billion for its banks. The audit results should make clear exactly how much of that amount is needed.

The troubles of Spain’s lenders have helped send the country’s borrowing costs spiralling to unsustainable levels in recent months, fuelling speculation that a full bailout is imminent.

So far, September has lived up to its billing as one of the most challenging months of Rajoy’s tenure. A huge demonstration in Barcelona on September 11th in which Catalan nationalists called for independence from Spain was followed days later by major anti-austerity protests in Madrid.

Yesterday Catalan premier Artur Mas put the central government under further pressure by calling early elections in his region for November.

“People have felt for some time that their politicians are just taking care of themselves,” said Manuel de la Rocha, of the Fundación Alternativas think tank.