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European Welfare State Model under Strain as Labor Tensions Rise

Weaned on decades of cradle-to-grave socialist largesse, workers across Europe are taking to the streets to prevent governments and private companies from imposing austerity measures.

by
Soeren Kern

Bio

February 28, 2010 - 12:15 am

Europe has been hit by a wave of industrial and social unrest in recent days and weeks, as workers across the continent push back against efforts to cut government spending and drive down wages. The uncoordinated strikes and protests, which have taken place in at least a dozen European countries and have threatened to paralyze much of the continent, may be a harbinger of more unrest to come.

With much of Europe in or just barely out of recession and many millions of Europeans out of work and collecting welfare checks, governments large and small are scrambling to fix gaping budget holes in an effort to stave off financial disaster. In Spain, for example, the government spent twice as much as it took in during 2009, with unemployment benefits constituting the largest single component of government expenditures.

Many other European countries are in a similar bind. Indeed, with millions of long-term unemployed Europeans on track to becoming permanent wards of the state, the European social model is under strain as never before.

In some European countries, there has been tough talk about the need to roll back the much-vaunted welfare state. In Germany, for example, pro-business Foreign Minister Guido Westerwelle recently called for a complete overhaul of the German social welfare system and warned that German workers were fast becoming “the nation’s suckers.” Westerwelle also said that increasing benefits to the long-term unemployed would create the kind of decadence that paved the way for the fall of the Roman Empire. “Whoever promises the people effortless prosperity encourages late Roman decadence,” Westerwelle declared. “Everyone who is young and healthy and has no relatives to look after must accept reasonable work, whether that is in the form of community work, a career or training,” he said.

Not surprisingly, Westerwelle’s comments have stirred considerable controversy. After all, the European social welfare state, which is supposed to guarantee a generous system of social benefits, relative wage and income equality, and a prominent role for organized labor, forms the basis of Europe’s post-World War II social order.

Increasingly, however, European governments (even some on the political left) are warning about the need to downsize the welfare state in order to save it. More and more frequently, there is talk of austerity and the need for belt-tightening measures, such as public pay freezes and raising the retirement age, designed to reduce the size of government. But angry European workers are having none of it.

It’s a similar story in the private sector, where companies are under pressure to restructure and/or downsize to remain viable. But European workers are growing increasingly restive, and many are taking to the streets.

Although many of the strikes and protests have been relatively short-lived, they represent growing popular resistance to attempts by European governments and corporations to cut back on spending. It remains to be seen whether European governments, which derive much of their political legitimacy from doling out social welfare benefits, will buckle under popular pressure and abandon reform.

However, if European governments stand firm and push through the painful austerity measures that many countries need to return to economic health, more labor strife will almost certainly follow. According to one analyst, the recent wave of protests could be “just the start of the greatest demonstration of public unrest seen on the continent since the revolutionary fervour of 1968.”

In any case, even if European publics are in denial about the future viability of the European social welfare state, a growing number of European governments seem to be acknowledging, albeit reluctantly, that their social and economic model is unsustainable. Strange, then, that many Americans view the European model as something to emulate rather than avoid.

What follows is a brief summary of some of the strikes and protest movements to hit Europe in recent days:

In Greece, where the government is striving to avert national bankruptcy, much of the country has gone on strike against government austerity measures. Public- and private-sector unions have called strikes to protest a range of measures aimed at reducing Greece’s budget deficit.

In Spain, where a 20 percent jobless rate and rising debt have prompted worries about a Greek-style budget crisis, workers in cities across the country have started protesting against the government’s proposal to raise the retirement age by two years to 67.

In France, an air traffic controllers strike grounded hundreds of flights in Paris, one of the busiest air travel hubs in Europe. French unions are protesting the planned consolidation of air traffic control networks in Europe. The planned merger could see French air traffic controllers, who are currently among the best paid in Europe, lose their generous perks, which include 30 weeks of vacation per year. (French air traffic controllers are required to work only 100 days a year.)

Also in France, a massive strike has hobbled operations at Total SA, Europe’s largest oil refiner. Employees are protesting a potential plan to close an oil refining plant in northern France; the plant at Flanders has been idle for more than six months due to a drop in demand for refined oil products. This being France, the government has intervened in the dispute by taking sides with the workers. The Industry Ministry has warned Total that it is “out of the question to close the Flanders refinery. Nor of course, to close any other one in France.”

(Meanwhile, France Telecom, the main telecommunications company in France, has replaced its CEO following a wave of suicides at the company. Nearly 40 France Telecom employees have committed suicide since January 2008. Labor unions blame the suicides on stress caused by the former CEO’s attempts to restructure and modernize France Telecom to meet intensifying competition from abroad.)

In Germany, some 4,000 pilots began what was meant to be a four-day strike at Lufthansa, Germany’s flagship carrier. The pilots are worried the company might try to cut staff costs by shifting jobs to its foreign subsidiaries, where wage costs are lower. Unions representing 16,000 Lufthansa cabin crew are threatening to join the pilots if the company fails to reach an agreement with them as well. Lufthansa pilots agreed to suspend their strike for two weeks after a court ruled against a claim by the union that the airline was obliged to apply German labor law to all of its employees, even those working outside Germany.

In Britain, the union representing 12,000 stewards and stewardesses for British Airways has threatened to strike. The dispute revolves around a decision by British Airways to reduce the number of staff on long-haul flights and to introduce a two-year pay freeze. The changes are forcing the cabin service directors (the most senior crew) to no longer just oversee the staff, but to start serving meals and drinks as well. In a statement, the union says British Airways cabin crew feel a “deep sense of grievance” about their treatment by their employer.

Also in Britain, more than 250,000 public sector workers are set to strike over what their union says are “macho” government cuts to redundancy payments. The government says the changes, which place caps on pay-offs to those laid off or taking voluntary redundancy, will save £500 million in taxpayer money. The union says the cuts are illegal and are threatening a series of rolling strikes throughout March and April, just weeks before the expected date of the general election, if the government refuses to back down.

In Italy, workers at the troubled car giant Fiat went on strike to protest the planned shutdown at the end of 2011 of an assembly plant in Sicily. (Even the Pope weighed in on the matter.) On February 22, Fiat abruptly halted production at all of its Italian plants for two weeks because of a fall in new car orders. The measure places 30,000 workers on unemployment benefits.

In Finland, dockworkers staged a strike following the breakdown of contract negotiations. The dockworkers union has threatened to call an open-ended strike, which would choke off most of the country’s exports.

In Belgium, workers at the Carrefour supermarket chain are bracing for a nationwide strike over plans to cut 1,672 jobs in Belgium and close 21 stores in the country by the end of June. Carrefour says its operations in Belgium are “structurally loss-making.”

In Poland, nurses are threatening a nationwide strike unless the Health Ministry can reach a deal on raises. Currently, nurses are on strike at four hospitals in southern Poland. Some have even begun a hunger strike while others have gathered outside the Health Ministry, playing revolutionary ballads from Poland’s communist era.

In Portugal, unions representing Portugal’s public-sector workers are preparing a national strike to challenge a wage freeze that the government says is necessary to cut a burgeoning budget deficit.

In Ireland, public sector workers have been staging a go-slow since February 1 in protest against pay cuts in last December’s austerity budget.

In the Czech Republic, transport workers are threatening to halt trains and buses to support their demand for a lower tax on benefits.

Soeren Kern is Senior Analyst for European Politics at the Madrid-based Grupo de Estudios Estratégicos / Strategic Studies Group. Follow him on Facebook.
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