Madrid, Jul 17 (IANS/EFE): Protests by public employees against the Spanish government's decision to cut their pay as part of a new austerity package continued here Monday.

Prime Minister Mariano Rajoy's cabinet agreed last Friday to implement the initiative, which eliminates the traditional Christmas bonus for public employees, increases value added tax and reduces unemployment benefits, among other steps.

Spain's fourth austerity package in seven months is aimed at achieving 65 billion euros ($80 billion) in savings to meet a European Union-mandated budget deficit target, the conservative premier said last Wednesday in an address to parliament.

Civil servants, who accepted a 5 percent pay cut under the 2008-11 Socialist government, launched protests the day after Rajoy's speech to lawmakers and thousands of public employees have taken to the streets of the capital since then.

Monday's demonstrations included a mock funeral march down Madrid's Gran Via to mourn the "death" of labor rights and public services with placards and T-shirts bearing slogans such as "This is a robbery", and "More firefighters, fewer political appointees".

The procession ended outside city hall and the lower house of Parliament, both under heavy police guard.

On Sunday, police prevented some 200 public employees from attempting to mount an occupation in front of parliament.

Spain's economy has been battered in recent years by the global recession and the collapse of a massive real-estate bubble, which has left many banks saddled with toxic property assets.

Overall unemployment stands at more than 24 percent, while Spain's young people are facing a jobless rate of 50 percent.