A familiar scene: a combination of rising prices, budget cuts, frozen wages and redundancies brings disgruntled workers onto the streets en masse. Nowhere has this been more evident than in Greece, whose economy has been in free fall since before Christmas.
The latest bout of industrial action occurred after the IMF and the government tried to work on a bailout. On April 21, dockworkers blockaded Athen’s Piraeus port, as part of a 48-hour strike called by communist trade union PAME against belt-tightening policies aimed at pulling the debt-choked country out of a crisis that has shaken the euro. Greece had previously started talks with EU and IMF officials to hammer out details of a plan that could offer up to €45bn. Launching a series of strikes, PAME said austerity measures including tax hikes and public wage cuts only hurt the poor and should be withdrawn.
“Our strike was a necessity, due to the government’s fierce attack on our pensions, our employment rights and our income. We want measures that will protect the unemployed and we will step up protests,” said leading PAME member George Perros. A few days later more Greeks went on strike, led by public sector union ADEDY, which represents half a million workers. “It shouldn’t be workers who pay for the crisis, but those who have the money,” ADEDY said in a statement. “We demand that they withdraw the measures that reduce our income and burden us with new taxes.”
There was good news: air traffic controllers cancelled a planned walkout because they said they did not want to burden passengers stranded at airports due to the volcanic ash. However, private sector union GSEE, which represents two million people, plans a walk-out in May.
Greece has taken a severe beating on financial markets since the socialist government revealed in October that the country’s budget deficit had ballooned to 12.7 percent of GDP, casting doubt over whether it could handle a debt mountain of €300bn. Opposition to the government’s deficit-cutting plans has been limited but analysts fear a stronger reaction if Greece took further austerity measures in order to secure access to aid.
“If you continue to tighten fiscal policy, the economy will contract even more,” IHS Global Insight’s Diego Iscaro said. “People can only take so much – if taxes continue to go up and spending continues to be cut, support for the government will plunge and that will be counterproductive.”
Symptoms spread
Greece is no stranger to industrial disputes – and neither are some of its European neighbours. According to research published last year by Birkbeck College, London, there were 98 general strikes in western Europe over the period 1980-2008. Five countries had no strike – Denmark, Sweden, Germany, Ireland, and the UK. However, 38 of these 98 strikes occurred in just one country – Greece. The research also found that general strikes are heavily concentrated in the southern European economies of Portugal, Italy, Greece and Spain (the “PIGS”), with France being a close contender.
Following recent events, it looks as though union activity is likely to continue to be strong in those countries for a while longer. In Spain, almost 5,000 postal workers took to the streets of Madrid in mid-April to protest at the planned privatisation of the nation’s postal service and have threatened to call a general strike in June if the Ministry of Public Works refuses to negotiate.
The CCOO, Csi-F, Sindicato Libre and CGT – trade unions representing 75 percent of all postal workers – accused the ministry of cutting their budgets and attempting to reduce the workforce in a unilateral decision. They are also demanding that the government introduce a “Postal Law” which would consolidate the existing post offices into a public company capable of competing with private enterprise ahead of the planned privatisation of the service at the beginning of 2011.
The postal service is the oldest and biggest public company in Spain, but it has debts of €150m and unions believe that in its current state, without the immediate implementation of an emergency plan, it will not be on an equal footing with private companies.
France has also lived up to its name as a hotbed of militancy. French employers have » tried to stifle the influence and effectiveness of unions through subtle tactics such as dividing enterprises into smaller units to dilute trade union density and inhibit contacts between union delegates and workers. However, over the past couple of years there has been a spate of “boss-nappings”—taking senior managers hostage.
Employees of Continental went on the rampage when their jobs were axed. And in late April, newspapers did not appear as print and distribution workers went on strike.
Added to that, the government looks as if it could be preparing for a fight with public-sector unions over the spiralling cost of pensions. The government wants to raise the retirement age from 60, though the unions call this right non-negotiable, and most citizens seem to agree.
Whereas most other European countries have already shifted towards higher pension ages up to 68, France has not changed its pension age, although it has extended contribution periods for a full pension to try to cover the costs of an ageing population. The long-term shortfall in the pension system would be much worse were it not for the fact that France has one of the highest birth rates in Europe.
France has a compulsory pay-as-you-go pension system in which employers and employees pay contributions during their lifetimes. The system is fragmented between different schemes with public employees in particular enjoying higher pension benefits than their counterparts in the private sector, a situation the government wants to end. Recent figures suggest that the country’s pension system faces a deficit more than twice as large as forecast just three years ago unless it undertakes major reform. The projections underline the need for swift changes to the pensions system if France is to cut its budget deficit from 8.2 percent in 2010 to three percent by 2013.
The pensions black hole is now expected to reach €40.3bn by 2015, rather than the shortfall of €15bn predicted only three years ago, a consequence of the surge in unemployment precipitated by the financial crisis. The body forecast a deficit in an unreformed retirement system of €72bn-€115bn by 2050. But findings have been roundly criticised by French unionists. Medef, the employers organisation, questioned the economic assumptions. It pointed out that the three scenarios outlined were all based on the assumption of unemployment of only 4.5 percent in 2020-21, a rate of near-full unemployment France has not experienced since the 1960s.
Power to the people
Even those countries that have had little strike activity over the past 25 years are beginning to feel more militant. In April Scottish trade unionists vowed to oppose all employment legislation stemming from the European Commission. Delegates at the STUC also agreed to set up a conference to focus on the recent European Court of Justice judgements which render union action difficult.
Yet for all this, none of the recent news implies that industrial relations around the world have returned to the dire state of two or three decades ago. By historic standards, they are still “pretty good”, insists Paul Nowak, national organiser of Britain’s TUC. In most rich countries, union membership and the amount of time lost to strikes has plunged. The days when unions had big strike funds, and could ride out long disputes, are mostly gone.
In Britain, the number of working days forfeited to strikes fell to 460,000 in 2009 from 1.04m in 2007. In 1979, when the first Thatcher government swept into power with the aim of crippling unions, the figure was 29 million. In Denmark, which saw a rise in unrest among nurses and care-workers in 2008, industrial workers voted in mid-April to accept their union’s recommendation of minimal pay rises. In Poland barely 13,000 workers were involved in strikes last year, compared with 209,000 in 2008.
The financial crisis is putting public services everywhere under pressure. Dependent on government funding when the state’s coffers are bare, job cuts and increased workloads go hand in hand, particularly as these organisations do not have other markets that they can reach into. By 2014 the public debt of the rich countries will reach an average of 110 percent of GDP, up by almost 40 percent from 2007. Reducing these levels will be a brutal job. Public sector unions do have an ace up their sleeves – strikes by providers of essential services have a harsher effect on the economy than one at a private firm with competitors.
Yet there seems to be a reluctance by unions in most countries to show their hand. In Ireland public-sector workers have reacted to a sharp downturn with impressive self-denial. In February 2009 they were asked to take a seven percent pay cut, and offered only token resistance. At the end of March this year the government confirmed a deal with trade unions, under which future pay increases for the country’s 350,000 state employees are tied to equivalent efficiency savings in public service delivery. It’s an innovative scheme, achieved with only a smattering of industrial action. “Irish workers and taxpayers have faced up squarely to what is, remarkably, widely understood to be a necessary belt-tightening,” said Patrick Honohan, the Governor of the Central Bank. It seems that workers in most parts of the EU feel the same way – work with governments to protect jobs, rather than against them.
Trade union abuses across the EU
While trade unionism membership may be declining in most states, it has done little to allay the fears of employers about the threat of strike activity, and the disruption it can cause to business and public services. According to a survey by the International Trade Union Confederation (ITUC), union abuses are on the rise. For example, in Poland the law gives all workers – including civilian employees of the armed forces, police and border guards, the right to form and join trade unions – but the forming of a trade union is frequently followed by dismissal of its leaders. The reinstatement of unfairly dismissed trade union leaders often takes around two years. Furthermore, the use of surveillance techniques to intimidate trade unions is a growing trend.
In Spain, employers are deliberately trying to stamp out workers’ rights by hiring temps who do not have the same level of protection in the workplace. Statistics confirm that Spain is the EU country with the highest percentage of workers on temporary contracts, 63 percent of whom are immigrants. This clearly influences the working conditions of these workers. Taking advantage of these workers’ uncertainty about their future employment, employers have made them accept working conditions that are not in line with legal standards. Whilst in theory temporary workers’ contracts are covered by a sectoral agreement fixing their terms of employment, in practice collective bargaining is being replaced by individual agreements between managers and employees, who are obliged to accept what they are offered.
The November 2008 edition of the European Commission’s Progress Report on Turkey’s accession to the EU found that the establishment of full trade union rights remained problematic. It mentioned reports about restrictions on the exercise of existing trade union rights and dismissals due to trade union membership, as well as the need for Turkey to ensure that trade union rights are fully respected in line with EU standards and the relevant ILO conventions, in particular the rights to organise, to strike and to bargain. The percentage of the labour force covered by collective agreements remains low.