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
    0

    Comment number 278.

    277.
    DurstigerMann
    "that's why i hope, for the sake of Austria, that the media campaign against Frank Stronach not only fails, but that enough people vote for him that he and his party can actively participate in government"

    At the moment his chances are similar to those of the Green Party.
    While the Greens favor a coalition with the Socialists, Stronach would go the Conservative path.

  • rate this
    0

    Comment number 277.

    @276austriacus

    that's why i hope, for the sake of Austria, that the media campaign against Frank Stronach not only fails, but that enough people vote for him that he and his party can actively participate in government.

    As a German, i am sad that we don't have a sinilarly successful yet genuine and independent man going into politics in order to change things.

  • rate this
    0

    Comment number 276.

    274.
    margaret howard

    Similar in Austria. From the moment I was capable of watching Austrian domestic politics, "Verwaltungsreform" (=streamlining of administration) has been on the agenda.. But as soon as the voters of one of the 2 major reigning parties are concerned, the endeavours stop immediately.
    Suggestions of the "Rechnungshof" (=court of auditors) are ignored consequently. Embarrassing.

  • rate this
    +1

    Comment number 275.

    I still find the word "austerity" bizarre in this context. It conjures up Dickensian images of workhouses.

    In truth, it now means living within one's means. Take a drunken gambler, give him a coffee and tell him to stop frittering away borrowed money - would that be austerity? Or just common sense budgeting?

    Don't let this emotive word fool us. It means the end of partying on credit.

  • rate this
    0

    Comment number 274.

    271 austriacus

    It's just as bad here. Our new Education secretary plans to halve his department's annual expenditure of £580 million and sack 1 000 staff.

    The thing is, what where they all doing there in the first place?

    Shows that profligacy has nothing to do the the EU but everything with weak governments who daren't take on their own unions.

 

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