The Show May Not Go On: The Madrid Royal Theater website's promotion for its production of Cyrano de Bergerac is threatened by a financial dispute stemming from government cutbacks. (Screenshot)

The pain spares no one in Spain. A salary dispute in the country's most prestigious opera house could spoil the debut in two weeks of one of this season's most anticipated shows starring acclaimed tenor Plácido Domingo. The employees of Madrid's Royal Theater are threatening to strike during the five performances -the first on May 10- in which Domingo will play Cyrano de Bergerac, in a show directed by Petrika Ionesco and conducted by Pedro Halffter.

The salary dispute is -not surprisingly- dramatic. Employees of the public opera house are being asked to return a total of 1 million euros that were mistakenly paid after management neglected to apply a 5 percent wage cut that was mandated in May 2010.

Q&A With Placido Domingo, IFPI Chairman, Opera Star

A new manager, Ignacio García Belenguer, took the helm of the distraught theater Wednesday and made it clear there is no away around it. More than 300 employees will lose anywhere between 3,000 and 6,000 euros, to be deducted this year and next.

"There was a mistake," García Belenguer said, but the numbers are set in stone. "It's the law, however painful it seems." Indeed, the government already applied the cut in its 2012 budget it directed for the Royal Theater.

"I'm completely sure employees will be responsible. A strike would hurt all and the economic consequences would be significant. We have to turn a page," he said, adding that he is willing to negotiate over the payback period, but not the amount.

The pleas also came from Domingo, who last week asked the government to intervene in favor of employees, but also implored for some flexibility from unions. "There is nothing sadder than a closed theater, or that a theater where this has been planned for years is forced to close [because] of a strike."

"A solution must be found and that solution is at the highest level," Domingo said. "I don't think it will come from the theaters. Or will it come from the Culture Ministry?" But if a strike is unavoidable, something should be done to "move it up" and minimize the consequences.

Belenguer, the new administrator, also asked employees to avoid the strike during Domingo's show, even as he refused to rule out layoffs and other measures to confront the same draconian austerity that is eating away at Spain's proud opera heritage.

Barcelona's Liceu, an opera house equally renowned to Madrid's, in February announced it had cancelled 27 performances this year affecting 7 shows, and that it would close for two months in an effort to balance its deficit of 3.7 million euros. At Valencia's Palau de les Arts Reina Sofía, Spain's third famous opera house, employees approved through a referendum cuts between two and 15 percent for salaries higher than 26,000 euros a year to avoid mandatory layoffs.

Both public and private sponsorship funds have dried up as a result of Spain's worst economic crisis in nearly a century. Unemployment stands at more than 23 percent and is expected to peak at 25 percent. Spain's 5.3 million unemployed, in a population of 46 million, is Europe's highest by far.

The previous government implemented one of Europe's strongest fiscal reforms, cutting the deficit from 11 percent in 2009 to 8.5 percent in 2011. One of its measures was a salary cut for public employees that is now biting.

But austerity measures are only worsening. The new government cut 27 billion euros in its 2012 budget, the biggest fiscal trim in history, on top of increasing tax revenue, in an effort to reach the EU revised target of 5.3 percent deficit of gross domestic product.

More tax increases are expected, and healthcare costs have increased, and pensions have been effectively frozen. Worse, the economy is expected to contract at least 1.5 percent in 2012 and not return to growth until 2014.

Solomonic Domingo is both an actor and director, putting him on both sides of the debate in Spain, management and artist. "It's almost impossible for an employee who assumed he wouldn't have to return the money to pay it back suddenly, because in most cases he won't have the money to."

Speaking about the unions that called for a strike, Domingo has told them "I'm with you and I want you to have what you deserve, but I can also tell you if you take this too far, you won't be able to fix anything. You must realize that it's too much."

"This is a time of austerity," Domingo said, "and we must all think about how important that is. But from the highest spheres [of government] they must think about people who live on a day-by-day basis."

Whatever the case, management has two weeks to negotiate with its employees a resolution to avert the strike. Both sides appear locked in their position. And the fact that budget cuts will only worsen in the near future just makes it even harder to be optimistic for Spain's opera heritage.