European Workers: ‘Not on our Backs!’

Greek workers are bracing for a general strike in late June—the third in two months—as workers across the country escalate their protests against budget cuts and wage cuts. The strike will coincide with new legislation designed to pare down the country’s pension system, the latest in a string of deep cuts aimed at Greek workers.

The cuts were the quid pro quo in a $146 billion rescue package put together by the European Union and the International Monetary Fund after Greece ran into difficulties borrowing money. The bailout was adopted by the Greek parliament in May, sending hundreds of thousands of protesters into the streets.

“They’re leveling workers and society down to the bottom,” said Ilias Vretakou, vice president of the public sector union ADEDY at the May 5 demo. “They’re stealing our wages, they’re stealing our pensions, they’re stealing our social rights, they’re stealing our right to life.”

ADDING UP THE PAIN

Under the plan, government workers in Greece will see their pay frozen for the rest of the year, and supplemental wages will be cut by up to 30 percent. The government wants to freeze pensions, raise the retirement age, and reduce pensions by up to 30 percent.

The government also has plans to privatize parts of the railroads, post office, and public utilities, and to deregulate industries ranging from pharmacies and construction to trucking and vacation cruise ships.

Younger workers will face a two-tier wage system, and companies in the private sector will double the number of workers they can legally fire per month.

According to the IMF, even under the most optimistic assumptions, economic activity will contract 7 percent over the next two years, and unemployment will rise from 9.4 percent last year to 14.8 percent by 2012.

WHAT HAPPENED?

Greece’s newly elected government revealed late last year that its predecessors had hidden massive amounts of debt with Enron-style accounting tricks. These shenanigans were enabled by Wall Street firms like Goldman Sachs—which helped the government keep $1 billion in debt off the books. Banks across Europe had also encouraged Greece to flout European Union rules and run up deficits.

In the last 10 years Greece’s conservative government had slashed corporate taxes and launched big-spending projects like the 2004 Olympics, turning a blind eye as tax evasion—particularly by the rich—became the new norm.

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Ironically, many of the banks now choking off credit to Greece are the same ones saved from certain death by government bailouts during the 2008 financial meltdown. And like those earlier bailouts, the Greek “rescue package” intends to have citizens pay for the folly of banks and the government.

As the Wall Street Journal put it, “the IMF program requires Greece to transform itself into a lower-wage competitor” so that it can honor its debts to international bankers at full face value.

SHADOWS FALLING

Unfortunately for the rest of Europe’s workers, the Greek government’s model for dealing with the banks’ crisis is spreading. In Spain the government wants to cut public employee wages by 5 percent, cheapen unemployment benefits by half, and weaken collective bargaining laws. Portugal’s government is weighing cuts to unemployment benefits and public sector wages, as well as privatization of the post office and rail system.

Similar measures are proposed in Italy and Ireland, and the new conservative government in England is also moving to shore up its standing with the international bankers.

Like their counterparts in Greece, Spanish unions are calling for a late June general strike, after public sector workers walked off the job June 8. A general strike is scheduled for June 25 in Italy, and Portuguese unions are considering job actions after 150,000 protesters filled the streets of Lisbon May 30.

COMING TO AMERICA?

Of course, attacks on workers have not bypassed the U.S., as any of the millions of public employees forced out on unpaid furloughs last year can testify.

Conservative pundits are fast to make comparisons between Greece and the U.S., warning that “it could happen here.” They point to the U.S. federal deficit—swollen from bank bailouts, stimulus bills, and two wars. But politicians have ruled out proposals to shrink the deficit by taxing corporate bonuses and Wall Street speculation, or by increasing corporate tax rates, among the lowest in the industrial world. Instead, they’ve put a bull’s-eye on the backs of teachers, bus drivers, and homecare workers.

The Obama administration has jumped on the bandwagon. Obama’s blue-ribbon Commission on Fiscal Responsibility and Reform, charged with charting a course back to balanced budgets, is expected to demand further belt-tightening from workers, including cuts to Social Security.

A version of this article appeared in Labor Notes #376, July 2010. Don't miss an issue, subscribe today.