Strikes a barometer of Europe's austerity tolerance

 
A worker stands at a picket line at Mitrena shipyard, south of Lisbon A picket line at a shipyard in Portugal as the country observes a strike in protest at austerity measures

Across Europe people are taking to the streets to express their anger and frustration with austerity.

There will be disruption and protests. General strikes have been called in Spain and Portugal, and there will be action in Greece, Italy, Belgium and France.

The day will serve as a barometer of the mood in Europe.

Is it increasingly angry? Or just resigned?

The question that worries many of Europe's leaders is when will patience run out? When will tolerance of high unemployment and declining living standards snap?

The eurozone's strategy still holds. Deficits must be reduced. Structural reforms - such as the opening up of labour markets - are the key to future growth.

Countries must regain their competitiveness with Germany by slashing wages and pensions.

The European Commission believes that austerity may hurt growth in the short term, but in the longer term it will revive confidence in Europe.

It remains a hugely controversial policy. There are those who say it has failed in Greece.

There, the economy has shrunk by 23% in five years. Many economists insist it is madness to continue with austerity when so many southern European countries are already in recession.

Spain has an unemployment rate of 25% and is in recession. In five of its 19 regions, unemployment stands at more than 30%.

Yet the government in Madrid is embarking on another round of spending cuts that will only further weaken demand.

The human cost of those policies has been underlined in the past two weeks by two suicides linked to the repossession of homes.

Unemployment rates

  • Spain 25.8%
  • Greece 25.4%
  • Portugal15.7%
  • Eurozone 11.6%
  • France 10.8%
  • US 7.8%
  • Belgium 7.4%
  • Germany 5.4%
  • Japan 4.2%

Eurostat

The protesters will march behind the slogan, "They are taking away our future".

The Greek prime minister, while pushing austerity measures through parliament in recent days, has also said he accepts his country is facing the equivalent of the Great Depression.

Austerity-lite

Recently, the IMF conceded it had underestimated the impact of austerity on living standards and there are signs of greater flexibility in the eurozone.

Deficit-cutting targets for Spain, Greece and Portugal have been eased.

Brussels is said to have moved towards an "austerity-lite" policy, but the fundamentals stand. Southern Europe has to reduce its deficits and debts.

The key question remains; how will growth be restored?

Without it, Europe faces a future of hardship. German Chancellor Angela Merkel has said the eurozone crisis may last five years.

She has just visited Portugal, where she praised the sacrifices being made and promised that one day the "painful" changes would be positive, but she was booed during her visit.

A youthful generation may not be prepared to accept unemployment at more than 50% for five years or longer.

In the past three months the eurozone crisis - as reflected by the markets - has eased. The economic outlook, however, has worsened.

Wednesday's day of action will be watched closely to gauge Europe's mood.

 
Gavin Hewitt, Europe editor Article written by Gavin Hewitt Gavin Hewitt Europe editor

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  • rate this
    +5

    Comment number 58.

    As long as unregulated markets are allowed to manipulate countries economies then nothing will get better. The profit makers from this obscene robbery of peoples livelihoods will go down in history as one of the greatest crimes ever. And while we are all blogging here - we're not on the streets marching for our rights or demanding change.

    Heads they win tails they win. Sad days

  • rate this
    0

    Comment number 57.

    On the very day that the citizens of Europe tell the EU what they think of it, some crazy sexist woman in Brussels imposes yet another rule on us so that we must have 40% females on company boards.

    The lunatics have really taken over.

    OUT! OUT! OUT!

  • rate this
    +1

    Comment number 56.

    #46 RealityPill

    "but Europe may return to being the Common Market, which was the sustainable objective in the first place."

    --that was NEVER the objective !

    http://www2.lse.ac.uk/library/archive/foyle_foundation/conservative_anti_common_market_pamphlet.JPG

  • rate this
    -2

    Comment number 55.

    54.
    Chris London

    I would have to disagree with you.

    For me it is evident now that eurosceptic countries and the eurozone are marching in 2 different directions.

    I have no intellectual problem with that, I just think it is a chance that has been given away.

    I do not know when the USE will become reality, but I am sure they will.

  • rate this
    +2

    Comment number 54.

    52.austriacus
    I would have to disagree with you, the Euro can't work unless there is a single fiscal policy for all member states. This can only happen with the unification of all member states. Thus the creation of the United States of Europe. This would mean the loss if not all then a significant amount of sovereignty. This would be very difficult to sneak through!!!!!!.......

  • rate this
    -3

    Comment number 53.

    @22 Germany should repay others. Not just for compensation, but resulting from other agreements that it conveniently ignores or denies. It's not a case that it can't repay (Greece can't because the austerity plan has worsened things; 120% up to 180%, higher unemployment, inflation, etc.), It's a case that they won't (even though they could). Greece does pay back what it owes. Germany????

  • rate this
    +3

    Comment number 52.

    11.
    Hfuhruhurr
    "Fundamentally the euro concept is flawed"

    The EURO works. The Greek state is failing.

  • rate this
    0

    Comment number 51.

    NeilS says its like a pantomime , I am not so sure , but if it were , I see Germany as one of the ugly sisters .
    EU politics and economics are not compatible ! No amount of austerity will create the economic growth the EU is seeking , the EU will continue slowly sinking .
    Get rid of the Euro , return members to their own currencies and slowly the member states will recover economic growth .

  • rate this
    -2

    Comment number 50.

    @23 Yup. There is a rumour that Germany wanted to leave the EZ, but had to create a situation whereby other countries would be blamed for the resultant mess. Germany needed others to rebuild its economy after it had destroyed everyone else's. It had debts written off. It over borrowed, even after its own Lisbon agreement. Once strong it wanted out. No morals or ideas of union unless Germany rules.

  • rate this
    +2

    Comment number 49.

    38. Marord

    'You can't clear debt by creating more debt'

    Ever heard of scorched earth, 'I love the smell of napalm in the morning'

    WW3 was forecast to be economic and you are watching it

    In a war the casualties are young, consistently and extreme political factions flourish

    At some point the public will get fed up with the cost and the Generals. This always happens unless you are 'winning'

  • rate this
    0

    Comment number 48.

    46 Reality Pill
    "As many debts will clearly never be paid off they must be written off"

    Except Greece there's no country in the EZ on the brink of insolvency, whether in the North or in the South. To wag the ghost of further defaults doesn't make them more real.

  • rate this
    +1

    Comment number 47.

    "41.lochraven
    The U.S. and Japan are not part of the EU, but the UK is. So why aren't the unemployment stats shown for the UK ? Hiding something?"

    UK unemployment data was released today. UK rate is 7.8% similar to the US. Not difficult to find as it is one of the main stories on BBC Business - so doubt anyone is hiding anything.

  • rate this
    +4

    Comment number 46.

    For there to be stability in Europe there needs to be stability in the financial markets. This requires confidence which will return when countries debts become sustainable.

    As many debts will clearly never be paid off they must be written off. When that happens the Euro may disappear but Europe may return to being the Common Market, which was the sustainable objective in the first place.

  • rate this
    +1

    Comment number 45.

    When will patience run out? It already is and EU asking for above inflation increases fuels the fire. Merkel says another five years and told we're all in this together. Tosh! I haven't seen any politician dressed yet by Primark ....their idea of austerity is probaly having last years champagne rather than vintage. The 'have's' can do it, the 'have nots' can't. Talk is cheap!

  • rate this
    +1

    Comment number 44.

    There is next to no chance that the public in Southern Europe will accept growing unemployment at this scale for another 5 years. Bearing in mind that 5 years is in reality just a guess & elections will occur in that time

    The Commission thinks that austerity will make the EU stronger. Equally well damaging 50% of youth may prove a disaster, after all what is the wealth of a country but its people

  • rate this
    0

    Comment number 43.

    26. Jason
    Would the British accept a 40% cut in wages
    - - - - -

    Many have already seen real wages fall by over 10% in the last five years. No sign of trouble yet. Just keep watching the circus.

    (an underestimation of average annual inflation at 2.5% over that period gives a compounded rise of over 13% in five years)

  • rate this
    -1

    Comment number 42.

    It's just like Cinderella, the glass shoe of the Euro was meant for Germany and not the ugly sisters of the PIGS countries, that is why it was never going to work without a fully federal Europe. I'm glad the UK didn't go to the pantomime.

  • rate this
    +7

    Comment number 41.

    The U.S. and Japan are not part of the EU, but the UK is. So why aren't the unemployment stats shown for the UK ? Hiding something?

  • rate this
    +4

    Comment number 40.

    No signs of any strikes here.

    Are you sure this is happening "across Europe"?

  • rate this
    +1

    Comment number 39.

    #31 Legasud

    --My compliments !

    - You are one of the first here to have done ┬┤homework┬┤

    -- All over Europe (including UK and USA) -- Hitler was seen as a Savior from Communism.

    -- and had support from Kings and industrial elites who had oppressed their working classes for centuries.

 

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