GREECE again ground to a halt this week as unions called a nationwide general strike to protest a €4.8 billion austerity package of spending cuts and tax increases put in place to trim the country’s rampant budget deficit.
While the photos that went around the world were of anarchist youths running street battles with riot police, the mainstay of the protests are not the radicalised young, the unemployed and hopeless with nothing to lose; rather, they are those with plenty to lose and beginning to feel the pinch, in particular public employees.
Nor is Greece by any means alone. Across Europe, austerity is being met by wave after wave of strikes. On Monday, 270,000 British public sector workers went on strike over plans to cap their redundancy pay – the walkout disrupting courts, tax offices, parliament and border controls – in a week that also saw British Airways cabin crew announcing strike dates over changes to pay and staffing levels.
Last week, tens of thousands of Portuguese public sector workers went on strike to protest wage freezes and other spending cuts, while public sector unions in Ireland are threatening action against the government’s fiscal reforms. And while German politicians and media have been mocking Greece, national carrier Lufthansa was grounded last month in protest at cost cutting measures.
If Cyprus has so far been spared such pain, it’s only because the government has been so timid in its cuts, terrified of offending its over-mighty unions. But with public finances “off the rails”, as the head of the Chamber of Commerce and Industry warned on Friday, the only question is whether the government will find the guts to take action before the country spirals the way of Greece.
The truth, however, is that it is not the civil servants, the bank employees and the airline staff that have suffered the most from this bleakest of recessions. So, public employees in Greece are seeing reductions in their thirteenth and fourteenth salaries, but how does that compare to the woes of small businesses and retailers? For all those British public sector workers complaining about the cap on redundancy pay (historically extremely generous and far larger than those available to most private sector employees), how many vulnerable private sector employees have simply lost their jobs overnight with barely a whiff of severance pay? And what of the impact of transport strikes and city centre lockdowns on small shopkeepers who can ill afford to lose a day’s takings?
Those going on strike are those who for decades have enjoyed among the best working conditions, in many countries often paired with higher wages than their private sector counterparts. They are those most protected from the impact of the recession, if not with jobs for life (though in many countries and in particular Greece and Cyprus it is just that), then with levels of protection that would make any other employee green with envy – where else, indeed, but the public sector is redundancy or early retirement an attractive prospect rather than a threat?
On the streets of Athens, civil servants demand why they have to pay for a crisis caused by foreign speculators and the incompetence of previous governments – but speculators do not attack without cause, and Greeks were only too happy to close their eyes to the incompetence of their leaders, the very militancy on display today intimidating all attempts to reform a bankrupt system.
It’s easy to blame the traders and speculators, but what their spectacular financial meltdown has done is to expose the emperor’s new clothes. Until now, everyone –from states to individuals – fuelled growth by borrowing money that would have to be repaid sometime in the future. But today is the tomorrow they thought would never come, when credit lines have dried up, and the extent of our exposure to debt has become brutally apparent. Today, America is so heavily in debt that even if it taxed 100 per cent of all household wealth, it would not be enough to put its balance sheet in the black.
To balance the public deficit, governments can only do two things: raise more money through higher taxes, and cut down services – and in particular the state payroll. It’s never going to be popular, but there is little choice, just as individual households are forced to make sacrifices in lean times.
Perhaps because their circumstances make them more keenly aware of economic realities and the vulnerability of their positions, private sector employees have shown a far greater dose of realism and solidarity in the face of the recession, with cases all over Europe of staff negotiating wage cuts or job shares in order to avoid redundancies. It’s about time the public sector learned a lesson from such examples. Yes, they are being asked to pay, and yes, it is painful, but their sacrifice is still much less than that of those who have no protection from the bleak realities of economic pain.
