Eurozone crippled by sweeping anti-austerity strikes ... - Financial Post

Spain pledges to spare needy from eviction after homeowner jumps to her death as bailiffs arrive

Two suicides in 15 days spark public fury and accusations that politicians and banks are complicit in de facto ?murder?

MADRID/LISBON ? Demonstrations turned violent in Spain and Portugal after millions took part in a mostly peaceful general strike on Wednesday in organised labour?s biggest Europe-wide challenge to austerity policies since the debt crisis began three years ago.

In Lisbon, marches ended with a level of violence not seen since the crisis began, with police charging demonstrators who hurled stones and bottles, leaving nearly 50 people hurt.

I?m on strike because those who work are basically being blackmailed into sacrificing more and more in the name of debt reduction, which is a big lie

Protesters in Madrid burned rubbish bins, filling the central boulevard with smoke, while in Barcelona demonstrators burned police cars.

Riot police fired rubber bullets to disperse protesters in both cities, where more than 140 people were arrested, including two said by police to be carrying material to make explosives, while more than 70 were reported injured.

Hundreds of flights were cancelled, schools were shut, factories were at a standstill and trains barely ran in Spain and Portugal where unions held their first joint general strike. Stoppages in Belgium interrupted international rail services.

Workers also protested in Greece and France against austerity policies that have taken a heavy economic toll and aggravated mass unemployment.

But the demonstrations organised by the European Trade Union Confederation seemed unlikely to force hard-pressed governments to change their cost-cutting strategies.

?In austerity, there is only depression and unemployment,? Fernando Toxo, head of Spain?s biggest union, Comisiones Obreras, told a packed Columbus Plaza in central Madrid.

Even non-union workers jointed protests and marches.

?This isn?t about politics or unions. This is social and economic. If we have to shut down the country we?ll shut it down,? said 24-year-old Mariluz Gordillo, a non-unionised phone operator at El Corte Ingles department store in Madrid.

In Rome, scuffles broke out between police in riot gear and demonstrators who threw stones, bottles and fireworks. About 60 demonstrators were detained. Protesters occupied Pisa?s mediaeval Leaning Tower for an hour, hanging a banner reading ?Rise up. We are not paying for your crisis?.

Rome-based U.S. journalist Barbie Latza Nadeau reported on Twitter that the city was ?paralyzed? as several separate demonstrations merged together into one huge crowd.

DEEPENING RECESSION

In Portugal and Greece ? both rescued with European funds and under strict austerity programs ? the economic downturn sharpened in the third quarter, data showed in Wednesday.

Things have to change? Money has ended up with all the power and people none. How could this happen?

Portuguese unemployment jumped to a record 15.8% while in neighbouring Spain, one in four of the workforce is jobless. Greece?s economic output shrank 7.2% on an annual basis in the third quarter as the debt-laden country staggers towards its sixth year of depression.

Close to 26 million people are unemployed in the European Union while governments take aim at spending on treasured universal health care and public schools.

?Things have to change? Money has ended up with all the power and people none. How could this happen?? said Esteban Quesada, 58, a hardware store owner in Barcelona who closed his shop to join the protests in Spain?s second city.

Throughout southern Europe governments are trying to put public finances back on track after years of overspending. Portugal and Greece have cut pensions and, with Spain, have slashed public sector wages as well as spending on hospitals and schools. Italy and France are also under pressure to control their budget deficits.

EU Economic and Monetary Affairs Commissioner Olli Rehn praised Spain on Wednesday for making progress in trimming its budget but acknowledged many Spaniards are struggling.

In Spain, most of the savings have been gobbled up by higher interest payments on the national debt, swollen by the cost of rescuing banks after a real estate bubble burst in 2008.

Germany?s central bank, the Bundesbank, said in a report on Wednesday that the eurozone debt crisis is still the number one risk to German banks and insurers, and the situation had not improved from last year.

Promises from the European Central Bank to support sovereign bond prices for countries that seek aid have brought some relief to Spain and Italy in the capital markets. On Wednesday Italy sold 3-year bonds at the lowest borrowing cost in two years.

SPAIN TO STAY THE COURSE

While several southern European countries have seen bursts of violence, a coordinated and effective regional protest against austerity has yet to force a significant policy shift.

Spanish Economy Minister Luis de Guindos told reporters on Wednesday the government would stay the course with spending cuts to meet ambitious deficit cutting targets, despite the strike.

?We?re on strike to stop these suicidal policies,? said Candido Mendez, head of Spain?s second-biggest labor federation, the General Workers? Union, or UGT.

Union leaders in Spain said more than 9 million workers joined the strike ? the second this year. The government said participation was much lower and played down the impact, saying many services were functioning normally. Stores opened normally in many parts of the country, though some had protesters outside.

About 5 million people, or 22% of the workforce, are union members in Spain. In Portugal about a quarter of the 5.5 million strong workforce is unionized.

Passions were inflamed when a Spanish woman jumped to her death last week as bailiffs tried to evict her from her home. Spaniards are furious at banks being rescued with public money while ordinary people suffer.

In Portugal, which took an EU bailout last year, public and political opposition to austerity is growing, threatening to derail measures sought by Prime Minister Pedro Passos Coelho.

Passos Coelho?s policies were held up this week as a model by German Chancellor Angela Merkel, who is despised in much of southern Europe for taking a hard line on the conditions attached to EU aid.

Inspectors from the ?troika? of the International Monetary Fund, ECB and European Commission ? who monitor implementation of the conditions ? also drew the protesters? anger.

In Lisbon, thousands filled a square in front of the Portuguese parliament shouting ?This debt is not ours? and ?Out IMF, out troika?. Police were guarding the building.

?I?m on strike because those who work are basically being blackmailed into sacrificing more and more in the name of debt reduction, which is a big lie,? said Daniel Santos de Jesus, 43, who teaches architecture at the Lisbon Technical University.

Major demonstrations were planned for the evening in Madrid, Lisbon, Barcelona and other cities.

GLUED UP

Protesters jammed cash machines with glue and coins, and plastered anti-government stickers on shop windows around Spain. Power consumption dropped 16% with factories idled.

More than 600 flights were cancelled in Spain alone, mainly by Iberia and budget carrier Vueling. Portugal?s flag carrier TAP cancelled roughly 45% of flights.

In Greece, which saw a big two-day strike last week as parliament voted to approve new cuts, hundreds of strikers rallied peacefully in central Athens, holding aloft giant Italian, Portuguese and Spanish flags and banners proclaiming ?Enough is enough.?

In France, five trade unions organized marches in more than 100 cities but did not call for a strike. Left-wing critics of Socialist President Francois Hollande said he has failed to address the concerns of French workers who have the same fears as their counterparts in southern Europe.

?It?s an unconditional surrender,? hard left leader Jean-Luc Melenchon said on France 2 television.

Read the full strike declaration adopted by the ETUC Executive Committee at their meeting on 17 October 2012 below:

1. The ETUC Executive Committee meeting on 17 October 2012 call for a day of action and solidarity on 14 November 2012, including strikes, demonstrations, rallies and other actions, mobilising the European trade union Movement behind ETUC policies as set down in the Social Compact for Europe.

2. They express their strong opposition to the austerity measures that are dragging Europe into economic stagnation, indeed recession, as well as the continuing dismantling of the European social model. These measures, far from reestablishing confidence, only serve to worsen imbalances and foster injustice.

3. While supporting the objective of sound accounts, the Executive Committee consider that the recession can only be stopped if budgetary constraints are loosened and imbalances eliminated, with a view to achieving sustainable economic growth, and social cohesion, and respecting the values enshrined in the Charter of Fundamental Rights.

4. Fiscal consolidation had a sharper effect than originally estimated by Institutions, including the European Commission and the International Monetary Fund (IMF). Indeed the IMF now admits that they grossly miscalculated the impact austerity measures have on growth. This miscalculation has an unmeasurable impact on the daily life of workers and citizens the ETUC represents, and brings into question the whole basis of austerity policies advanced by the Fiscal Treaty and imposed by the Troika.

5. The Executive Committee note mounting opposition among citizens and workers in the countries concerned and reaffirm their support for affiliated unions fighting for decent working and living conditions. This situation results from the lack of coordination of economic policies and the absence of minimum social standards throughout Europe. In the context of free movement of capital, this gave free rein to competition between states, in particular in the field of taxation, labour costs and social conditions.

6. They reiterate that social dialogue and collective bargaining are central to the European Social Model. They strongly oppose the frontal attacks on these rights, at national and European level. The ETUC Executive Committee urgently calls for immediate adoption and transposition of the European social partners agreements currently before Council.

7. They recall that the Union is treaty-bound to ?work for the sustainable development of Europe based on balanced economic growth and price stability, a highly competitive social market economy, aiming at full employment and social progress, and a high level of protection and improvement of the quality of the environment?. They further recall that the ETUC?s support for the Lisbon Treaty was mainly predicated on the full application of those objectives.

8. They note that discussions are currently under way among Institutions and governments about the desirability of further treaty changes. A change of direction is necessary and priority should be given to resolving the crisis in line with the three pillars of our proposed Social Compact for Europe, which is gathering increasing support. This is articulated around social dialogue & collective bargaining, economic governance for sustainable growth & employment, and economic, tax & social justice.

9. They insist that active solidarity, social progress and democratic accountability must be an integral part of the European project. They consider as essential that a social progress protocol to be included as an integral and operative part of any new treaty. The ETUC will evaluate any new step in European integration on this basis.

With files from the Associated Press

? Thomson Reuters 2012

Source: http://business.financialpost.com/2012/11/14/enough-is-enough-anti-austerity-strikes-sweeps-europe/

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