Less than a week after the European Union and Latin America secured a free trade deal, its member nations have announced deep cuts aimed at public sector employees, a move that has further polarized trade unions already upset over last week’s neoliberal agreement.
Faced with a deepening fiscal crisis, falling Euro and tumbling stock prices, several European countries announced austerity measures this week to allay investors’ fears that they may become the next Greece. Most of the budget slashing measures are aimed at civil servants and threaten to reduce the social safety nets and benefits public workers have enjoyed since World War II.
The policies have not been popular among unions and signal a growing political rift with their elected leaders. The belt tightening is facing increasing opposition from European trade unions and is in many ways similar to the mounting pressure and rhetoric against public workers here in America.
European governments face large deficits incurred by the global financial crisis and are now enacting market-oriented policies with the urging of the International Monetary Fund. The austerity measures vary, but countries like Britain, Spain, and Greece are looking to lower retirement ages, reduce unemployment benefits and reform pensions. Unions are challenging the measures by organizing strikes.
This month, the Spanish government announced the first public wage cuts since they became a democratic country in 1978. The $18.76 billion budget-cut measure included a five percent reduction in public sector salaries, wage freezes starting next year, and limited pensions.
President Jose Luis Zapatero implemented the measure to confront the third largest budget deficit in the region. But he has also damaged a previously strong relationship with workers and now faces opposition from Spain’s two largest trade unions.
Candido Mendez, secretary general of the UGT, Spain’s second largest union said the measure “marks a change in relations.” The largest union, Comisiones Obreras (CCOO), is planning to strike on June 8. The group is already riled by the government’s previous endeavors to raise the retirement age from 65 to 67.
Spanish unions only represent 16 percent of the workforce and the numbers are small compared to their counterparts in Greece — but the two countries are facing similar problems.
Last Thursday, Greek unions staged a 24-hour general strike in Athens to protest pension reforms as part of its three-year austerity measures undertaken after being bailed out by the European Union. Tax hikes, pay cuts and pension reform has increased public anger towards the cash-strapped government.The main unions, GSEE for the private sector, and ADEDY, the public sector union, said the cuts will increase the hardships already brought on by previous austerity plans. It was the first protest since May 5, when demonstrations descended into violence and deaths of three people.
In Britain, the new coalition government announced cuts totaling $8.7 billion in civil service jobs. The Trades Union Congress said the singular focus on reducing the deficit was a “huge mistake” and said the country should be focusing on unemployment and economic development. The Public and Commercial Services Union (PCS) said the plan has started to unravel “key elements of the welfare state.”
The PCS, the fifth largest union in the UK with over 300,000 members, points out that public sector workers are not immune to the sagging economy.
The notion that people working in the civil service and its associated bodies are somehow immune from the recession and enjoy gold plated pensions and comfortable salaries is completely false.
Civil servants are amongst the lowest paid in the public sector and have faced pay freezes and pay cuts in real terms. Job losses and job insecurity has been a fact of life, as has outsourcing and privatisation.
As previously reported here, public workers in the United States earn less than private workers, yet they continue to be portrayed as leeches of scarce government funds. Whether in the United States or Europe, officials are appeasing investors with market-oriented reforms.
Unions will continue to challenge these measures, but there’s an increasing disconnect with elected officials about the best path to recovery.