BBC BLOGS - Gavin Hewitt's Europe
« Previous | Main | Next »

Europe's shrinking public sector

Gavin Hewitt | 14:35 UK time, Friday, 1 October 2010

Anti-austerity demonstration in Brussels, 29 Sep 10

It has been another bad week for Europe's public sector.

Portugal announced it would cut civil servants' wages by 5%.

The Republic of Ireland has put a figure on the giant black hole in its banking sector and the public sector unions know that further cuts are on the way, when the budget is delivered in December. The Irish Finance Minister, Brian Lenihan, did not pull his punches: "a fundamental reappraisal of the public sector will have to take place".

In the UK unions are holding their breath for the spending review on 20 October.

Most of the cuts are not made from conviction that a smaller public sector would be beneficial; they are driven by necessity, the necessity to reduce budget deficits. Some like the Tea Party in the United States argue for smaller government. You don't hear much of that in Europe.

Most European leaders support what is called Europe's way of life with strong social protection. What they are wary to say is that the future will be different. But the other day Frits Bolkestein, a former EU commissioner, said: "the party is over...we shall have to work longer and harder, more hours in the week, more weeks in the year, and no state pension before the age of 67".

Among the protesters such views are rejected. One woman I spoke to in Spain this week said that workers had struggled for a hundred years to get the rights and benefits that they now had, and they were not prepared to watch them whittled away when it was the banks that had caused the crisis.

So far there have been pockets of anger, but most of the protests have been muted. In protest after protest that I have attended the majority of demonstrators have been union members. Rarely have the protests drawn wider support.

France, to a degree, is the exception. Protests against raising the retirement age have been huge. Although only 7% of France's workforce is in unions, some of the demonstrations have attracted families who have no union connections.

In Greece, where the violence has been greatest it has come mainly from anarchists who have attached themselves to union demonstrations.Turnout has tapered off at recent rallies. The main private sector union has said it will not strike against the cuts, but the public sector is not resigned to the new era of austerity and has vowed to launch further strikes.

But across Europe this is not 1968. The protests have not been enough to rock governments or to force a retreat on cutting spending and benefits.

It could still happen, particularly if growth is postponed and unemployment remains stubbornly high.

Portugal's largest union has called for a general strike in late November. Other protests are planned across Europe but so far they have not threatened governments.

I was in Dublin on Thursday, as was the former American President Bill Clinton. He quoted from Yeats to give this warning: "too long a sacrifice makes a stone of the heart". He urged political leaders to go beyond urging voters to "take the bitter medicine". There had to be a strategy that promised "new investment and hope" .

Therein lies the risk. For Europe has a long way to go to emerge from this crisis and 2011 is the year many governments have earmarked to make the deepest cuts. Ireland has had two years of austerity cuts and at least another two are in prospect.

Unemployment remains stubbornly high: 23 million Europeans are without jobs. Many at the moment see the era of austerity as a necessity. You hear, as I did from those who opposed the strike in Spain this week, that there is no alternative.

But what happens if late next year there are few green shoots? Many analysts put growth in the EU at around 1.6%. That will not be enough to spark a strong recovery. For governments the harder times may well lie ahead.


or register to comment.

BBC © 2014 The BBC is not responsible for the content of external sites. Read more.

This page is best viewed in an up-to-date web browser with style sheets (CSS) enabled. While you will be able to view the content of this page in your current browser, you will not be able to get the full visual experience. Please consider upgrading your browser software or enabling style sheets (CSS) if you are able to do so.