Thread: Europe's winter of discontent

Europe's winter of discontent

Thursday's French national strike reflects growing despair on the Continent with the way governments are handling the recession, says Adrian Michaels.

By Adrian Michaels
Last Updated: 4:50PM GMT 29 Jan 2009

Comments 61



A protester stands near a riot policeman during a demonstration in central Athens, where there has been violence on the streets for a week Photo: AP

The French are in revolt. On Thursday, teachers, television employees, postal workers, students and masses of other public-sector workers will be united in a hugely-popular strike with car workers, supermarket staff, journalists and thousands of others in the private sector.

One poll said that 75 per cent of the public supported the action, which has the backing of the large union groups and opposition socialists. It will be a big test for President Nicolas Sarkozy but, more importantly, the strike will mark the biggest protest so far in one of the world's largest economies against the grief and distress being caused by the catastrophic global downturn.

A depression triggered in America is being played out in Europe with increasing violence, and other forms of social unrest are spreading. In Iceland, a government has fallen. Workers have marched in Zaragoza, as Spanish unemployment heads towards 20 per cent. There have been riots and bloodshed in Greece, protests in Latvia, Lithuania, Hungary and Bulgaria. The police have suppressed public discontent in Russia, and will be challenged again at large gatherings this weekend.

This is turning into Europe's winter of discontent. Protests are widespread and gathering pace. It seems to be about national interests superceding the common cause that has united countries for decades.

Comparisons with the Thirties have tended to focus on the numbers – a lack of growth and waning consumer confidence, an increase in business failures and job losses, collapsing stock markets and currencies and panicky runs on banks.

But the Thirties were so much more than that. Economic hardship spawned demonstrations. It allowed extremists to gather support after a loss of faith in mainstream political movements. Economic catastrophe bred Franco, Mussolini and Hitler.

Do the protesters across Europe sense once again that their governments do not know what to do? Or is it melodramatic to worry about such a parallel?

Politicians are being assailed for their lack of competence. Mainstream parties – the Left in France and Germany, for example – are bickering and in crisis. France's mainstream unions have, in some cases, been following the actions of more radical groups such as SUD-Rail, which called a wildcat strike at a Paris rail station and stranded thousands of commuters. In Italy, traditional scapegoats such as immigrants are being expelled by populist politicians.

The Continent has been turned upside down as governments struggle to cope. Whatever was bad – state aid, bigger budget deficits, mass bail-outs – is now good. "Governments are making it up as they go along," says Alan Ahearne, an economist at the Bruegel think-tank in Brussels. "They are doing it on the fly."

Is it any wonder that the public finds it hard to imagine that our leaders have the ability to cope with such immense challenges when they have no rulebook?

Worse is that the institutions created to keep the peace after the Second World War are being over-ridden. The European Union, formed in the Fifties mainly as a way to stop the citizens of France and Germany from killing each other, is having its rules ignored as countries take unilateral action to safeguard jobs and businesses.

A bail-out of banks by individual countries might have been essential, but early EU efforts to stop healthy banks receiving money as well as unhealthy ones were quickly abandoned. But we are now seeing support for car companies, including that announced yesterday by our own government, and for airlines.

Once the precedent has been set, many in Brussels understand that Sarkozy or Silvio Berlusconi, Italy's prime minister, can hardly be stopped from helping Fiat, Renault or Airbus. Voters may believe that those very large employers are hardly less deserving than banks. Besides, this is a global economy. Europe says it must respond if America is bailing out its car companies in Detroit and distorting competition. But there are undeniable abuses. It is incredible to stretch the argument, as Sarkozy has done, to subsidising newspapers.

Brussels has made token noises about the rules of the single market being respected again some day, but its guidelines on bail-outs merely follow actions by member states. Only now do we hear that the EU is unhappy with the way our government is running Northern Rock.

It is very hard to see when the authority of Brussels will be restored, but Neelie Kroes, the competition commissioner, makes a compelling case for remembering why the EU has been successful. "The current global crisis will not be solved through local regulation or through a protectionist renationalisation of global markets," she said this month. "Social justice will be achieved…through free and competitive markets. Yes, the market economy comes with bubbles and recessions, but the long-term trend has been towards prosperity. Nobody can deny that competitive and open markets have been a main force behind the wealth and prosperity that the world has obtained so far."

The people on the streets are not listening. Iain Begg, a professor at the London School of Economics's European Institute, believes the protests in Latvia represent a loss of faith in the European project. He says that entry into the EU sparked spectacular growth, but there is disillusion now that growth has ground to a halt. Latvians may have had freedom of movement while seeking work, but there is no work any more.

Another reason for discontent is that this is the euro's first recession. Eurozone countries can no longer devalue and boost exports, assuming anyone still had the money to buy goods. And, while Germany and France can boost domestic spending, Portugal and Greece do not have the money. In smaller countries, people are protesting because all they see in their future are cuts in wages, reductions in living standards, spending cuts and tax increases as their governments struggle to restore order. "The public wants to see an equitable sharing of the burden," says Ahearne.

François Chérèque, the leader of France's moderate CFDT union, says the mass strike is a "cry of anger" by workers who feel the government has given billions to banks and industry, but not improved the "purchasing power" of ordinary people.

In such chaotic circumstances, extremism can flourish. But before we start waiting for collapsing governments, racism, murder, anarchy and world war, there are very important differences between today and the Europe of the Thirties.

International institutions and co-operation are far from dead. There are efforts to co-ordinate fiscal stimulus packages. Governments show an understanding that trade wars and the protectionist tariffs of the Thirties made the Depression worse. They have been throwing the kitchen sink at problems instead of allowing companies and livelihoods to founder through inaction.

In April, the G20 group of developed and developing nations will gather in London and have another chance to set the right planning and communications strategy. Barack Obama has started telling Americans that they will have to take a share of the pain, and that a fix will be a long time in the making.

This important step of managing expectations has not yet been taken by many European politicians. Americans generally believe that they have selected the right person for the job. Polls show they are prepared to give him plenty of time.

In contrast, Europe's leaders are struggling to convince their peoples to do the same. Instead, disgruntled voters sense chaos and a lack of purpose.

http://www.telegraph.co.uk/comment/pers ... ntent.html

I just hope (no, I just pray) that this country will not dissolve into rioting, nor are we invaded by those angry that Americans are losing their jobs and have cut back on purchasing imports, mostly garbage coming from China. We have come to the realization that while we have eight coffee mugs in the cabinet, we really don't need any more. We don't need any more sweaters made in Bulgaria, we prefer them made in Vermont. We don't need any more food imports grown in who-knows what conditions or fed what chemicals.
While I consider Obama right in his drive to produce more jobs to kick the economy going, I have too many questions about the invaders here, and none of those countries rioting have had any mention of the population pressures they may be facing.