Protests swell in Europe as governments trim spending

UK firefighters struck this week over pay, while French rallied to defend pensions.

The wave of industrial unrest sweeping Europe this autumn, disrupting public services from Scotland to Sicily, has put governments on notice from one end of the continent to the other: Chip away at the welfare state at your peril.

As finance ministers seek to keep budget deficits under control, and public-sector spending stagnates at best, unions are threatening more trouble ahead if their voices are not heard.

In Britain, firefighters were coming to the end of an eight-day strike today, but planning another one in December if the government does not meet their demands for a double-digit pay raise at existing staffing levels.

In Germany, a giant public-sector union has scheduled "warning strikes" next month in support of pay demands. And in Italy, teachers and other public servants will strike two weeks in a row to protest the government's spending plans.

This week, France was the focus of unrest as more than 100,000 government employees - led by rail workers - took to the streets across the country to defend their pensions and protest against any plans to privatize state-run businesses.

"The underlying common theme" behind these and other conflicts "is the constraint of public-sector pay and rationalization," in the form of cost-cutting, says Richard Hyman, professor of industrial relations at the London School of Economics.

In many countries, a driving force has been the shift to the euro. To meet the criteria for membership in Europe's single currency, governments have had to keep their budget deficits below 3 percent. That has meant less money for state-owned services like railroads, postal systems, schools, and hospitals, where workers have seen their salaries rise more slowly than in the private sector.

But fears for the future, rather than pay-packet problems, were what prompted French workers to demonstrate last Tuesday in nationwide protests. "No to Privatization" was the slogan printed on many banners, waving behind sound trucks blaring out techno music.

"I came to defend proper public services, 'à la française,' and to protect my benefits, especially my pension" said one railroad worker at the Paris demonstration who asked not to be identified. "The government is thinking about privatizing, and we are extremely wary."

A number of former state-owned enterprises, such as France Télécom and Air France, have already been largely privatized. But one-quarter of the French workforce still works in the public sector, and the new center-right government led by Jean-Pierre Raffarin has plans to sell off more firms.

Privatization is not the only threat to the state employee's pampered circumstances, though. European Union rules establishing a single market across the continent mean that state monopolies are having to open themselves up to competition.

Starting Jan. 1, for example, other companies than just the French postal service will be able to carry small parcels, and by 2009, any enterprise will be able to deliver any piece of mail.

By next March, European state railroad companies will have to allow private shippers to run freight services on their tracks. By 2007, consumers will be able to buy their electricity from suppliers other than Eléctricité de France, currently the only energy supplier.

"Our president said he wants the postal service to be a world leader, and we know what that means," fretted Luc, a mailman marching in Tuesday's demonstration. "It means he is going to want labor flexibility and short-term contracts. The sort of status we have achieved would be a brake on ambitions to be a world leader. Civil servants' status is incompatible with globalization."

That status includes not only almost absolute job security for life, but also higher pensions than private-sector workers after fewer years at work. Train drivers and postal workers, for example, can retire at age 55.

The French government, like many of its neighbors, has decided that the country can no longer afford such generosity when falling birthrates are changing the ratio between retirees and the workers who fund the pension system.

Mr. Raffarin has said his government will open negotiations with employers and trade unions early next year to reform pensions, and public-sector workers fear he will seek to increase their pension contributions while cutting their rights.

If that turns out to be the case, warned the railroad worker demonstrating Tuesday, "we can mobilize again, and next time it will be a lot tougher."

In the back of everyone's minds is the last time a French government tried to reform state pensions, in 1995. Then, union opposition was so intense - and public-transport strikes so crippling - that Prime Minister Alain Juppé resigned and his government fell from power.

"This time the circumstances are different," says Stephane Rozès, one of the country's top pollsters, "but the French public still supports state-sector workers insofar as they are expressing a shared fear of insecurity and defending their benefits.

"There is a potential for a great social upheaval in this country," he warns.

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