EUROPEAN LABOR UNREST - 2010

On 29 September most of Europe from the Balkans to Portugal and Ireland is under the cloud of mass strikes and demonstrations owing to the fiscal tightening (otherwise austerity measures in varying degrees) that countries are undertaking to reduce budgetary deficits. Even France announced massive cuts in order to stimulate growth! But across Europe, all governments are slashing budgets, raising indirect taxes, cutting public sector jobs, slashing social security programs for the sole purpose of achieving financial equilibrium that would result in long-term growth! The middle class and workers want growth, but they want shared sacrifice that has yet to come. The most significant demonstration is in Brussels, where an estimated 100,000 people from 30 countries are protesting the anti-labor anti-middle class anti-social welfare-pro-corporate welfare measures that EU has adopted. In January 2010 I took the plunge trying to predict the year ahead when I posted a piece on WAIS forum, which included the following: “Rising unemployment, wage stagnation which entails cuts in social security and social benefits will mean lower living standards for labor and the middle classes that must work longer to secure the ‘retirement dream’ they seek. Labor (urban and rural) and student unrest will accelerate in 2010, as it becomes clear that governments will demand that the lower classes will pay for the banks’ bailout.” For the next several months we will see the intensification of social unrest across Europe where the workers and middle class feel that they are paying for the bank bailouts and for policies that are designed to prevent upward mobility not only for the generation protesting in the streets, but for their children as well–indeed the biggest issue is the lack of optimism on the part of the middle class for its college-educated children. Widespread fear about austerity measures designed to strengthen the state with the intention of buttressing corporate welfare at the expense of the middle class and workers may be contained only if there is a new policy direction that proves concretely and transparently that the state will not be the sole instrument for finance capital, but that it will represent fairly the interests of all social classes. And here is where we have the problem. First, there is the reality that creditor countries, especially Germany, does not see how its corporate interests are furthered unless it strongly advocates deep cuts in budgets for deficit countries throughout Europe. To prevent social unrest from translating into the polarization of the voters, the best Germany can do, for today at least, is to ask the EU for some “slow down in the cuts”–and that is indeed what it has done. However, anything short of reducing unemployment and strengthening the middle class will simply entail going from IMF-style shock therapy to prolonging the pain for the remainder of what will most certainly be a slow-growth decade because the stimulus is coming from Asia, not the West. Second, there is the strikingly symbiotic relationship between the political and financial elites that the majority of the people recognize especially in times when things are not going so well with their own finances because they lost their job, their retirement savings was trimmed because of market downturns, the children will have a difficult time finding jobs when they graduate college, retirement age will be higher for all, and above all, the lack of optimism that plagues bourgeois society today. It is no secret that some EU officials are double-dipping, others are going to work for corporations whose agenda they represent to their former political colleagues, a few enjoying the role of both financial baron and political boss and still others amassing considerable personal wealth as a result of their “public service”! Third, centrist politicians, journalists, intellectuals, and human rights activists, especially in Germany and Sweden, are concerned that across Europe the extreme right is slowly gaining popular support as a result of the current economic crisis. The political expression of Europe’s extreme right wingers finds an audience among ultra-nationalists and xenophobes, especially anti-Muslim elements that are active mostly in northwest Europe, which is also the area that Al-Qaeda and other militant groups are currently targeting. Ethnocentrism, xenophobia, and political extremism as expressed by political parties and right wing groups has been fueled by socioeconomic polarization and the fact that even mainstream conservative parties like that of France project the image that they are less than hospitable to the Roms (gypsies), and they adopt a hard cultural line toward Muslim nationals while criticizing of course the fanatical and cruel practices of fundamentalists in Muslim countries. One could argue that socioeconomic polarization in the US has also exacerbated the same problems Europe is facing. A distinct aspect of the US experience is that it is a single country with a very long historical tradition rooted in conformity to the law and institutions, whereas Europe is made up of sovereign nations with very different traditions linked together primarily by a common currency and commercial relations. The current crisis has crushed the euphoria that once existed about the EU on the part of creditor nations of northwest Europe as well as those of the south and East that chronically suffered deficits and only occasionally experienced surpluses–Portugal, for example.
Today, there is a clear divide within the EU between the strong economies of the northwest that threaten the national sovereignty of all the rest, and there is fear on the part of the northwest that the weak of the south and east may drag down the entire union. The social unrest centered in Brussels and taking place across Europe is significant not so much for the economic message it is sending to the political and financial elites, but for the political message. If Iceland’s special court finds former prime minister Geir Haarde guilty for failing to prevent the financial disaster of 2008, and if he indeed goes to prison, this could signal a very democratic solution to the perception that political elites are in collusion with the financial elites to benefit each other. If no one is punished from the political and financial elites responsible for the crisis, if there is a perception that social justice is not something government need bother with because only markets matter in today’s cut-throat world, if the deep cuts are imposed solely on workers and the middle class, then sociopolitical polarization will continue and the clashes in the streets may become more bloody in the future and political instability will follow as I wrote last January.