Protests, labor unrest sweep across Europe
Athens - A wave of labor unrest swept across Europe on Wednesday, with workers coordinating across borders in hard-hit countries to protest years of narrowing prospects, shrinking wages and sky-high unemployment.
In what appeared to be the most coordinated pan-continental labor disruption since the euro crisis began more than three years ago, Spanish and Portuguese workers went on a general strike while Italian and Greek unions held part-day work stoppages. There was a limited strike in Belgium and small protests in richer nations across Europe.
But the protests seemed unlikely to disrupt what has become an almost unstoppable trend: grinding, painful austerity in the struggling southern European countries and limited prospects for the future. In Spain, many industrial workers were on strike. Italian unionists clashed with police. Transportation was hard hit in Portugal. In some countries, electricity consumption dropped noticeably as factories were idled.
In Greece, the worst-off of the 17 nations that share the euro currency, uncertainty lingered about the future funding of the government's crushing debt, even as more than a quarter of workers are unemployed.
The uncertainty mixed with fury that the country had approved even more austerity measures last week, but Greece was being made to scramble to raise $6.4 billion to make a debt payment to the European Central Bank later this week. Politicians had expected a new installment of the country's bailout plan to come immediately after a vote.
"The money we take from Europe, from the IMF, it doesn't go into the country; it doesn't go to start growth. It just goes to pay debts," said Evangelos Rokos, 39, a laboratory worker at the National Technical University of Athens who walked off his job Wednesday. He was marching down a once-elegant main artery of central Athens whose shops, one by one, have shuttered.
European leaders indicated this week that they are likely to give Greece a $40 billion tranche of its bailout by the end of the month, forestalling a bankruptcy and giving the country a bit of breathing room, along with an extra two years to implement painful measures to cut spending and open up its labor markets in an attempt to bring back economic growth. But their approval for the payment has been delayed, in effect, by arguments over just how grim Greece's fiscal picture is.
The International Monetary Fund has been saying because Greece's debt and future growth prospects are sufficiently bad, European governments and the European Central Bank will have to write off part of the bailout money they have sent to Greece if the country is to have any hope of getting back on track. European leaders, mindful of how unpopular that might be back home, have sounded more optimistic. They say that if they simply give Greece a bit more time to meet its targets, the country will return to sustainability on its own.
The dispute broke into the open earlier this week at a news conference, where IMF managing director Christine Lagarde rolled her eyes at the more optimistic proposals of Luxembourg Prime Minister Jean-Claude Juncker, who leads the group of euro-zone countries.
At a conference on Wednesday in Malaysia, Lagarde said that "obviously from the IMF's perspective, we expect a real fix, not a quick fix, and that means clearly debt that is sustainable as quickly as possible," Reuters reported. The IMF also has been pushing for the pace of austerity to slow in the hardest-hit countries, saying now that some measures had been doing more harm than good.
But with economies slowing down across Europe, even rich countries may soon start feeling the pinch, making big write-offs for the struggling periphery even more politically unpopular. Germany's central bank on Wednesday released an annual report on the country's financial stability that warned that fears were not going to go away.
"Risks for the German financial system have not diminished in 2012 compared to the previous year. The European sovereign debt crisis has even grown more acute at times," the report said.
In Greece, the measures that narrowly squeaked through parliament last week will clamp down further on some of the most vulnerable parts of the population. A retiree with a monthly pension of $1,270 will lose five percent of it.
And the failure to send over new money that is needed to keep Greece from bankruptcy has further hit an already divided country.
"The only thing that will collapse is what remains of your credibility," Alexis Tsipras, the leader of the leftist opposition Syriza party, said last week in parliament before the budget vote, urging a rejection of the austerity measures and of the bailout more broadly.
Syriza is now the most popular political party in Greece, according to opinion polls.
Elinda Labropoulou contributed to this report.
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