Strike on summit day shows task at hand

January 29, 2012 - 12:25 PM

BRUSSELS (AP) — German Chancellor Angela Merkel and other European leaders meeting for a summit will only have to look out of the window to see the biggest problem with their steady diet of austerity and belt-tightening to fix the financial crisis: disgruntled workers organizing a nationwide strike to protest the direction in which Europe is heading.

That is, if the 27 government leaders can even get to European Union headquarters in time for Monday's meeting.

Belgium's three main unions are joining hands as of late Sunday in a 24-hour strike to protest national budgetary measures that have in part been imposed on Belgium by the EU. If the country hadn't met cost-cutting targets, financial sanctions would have been imposed.

Instead of a beacon for a better future, many Europeans are starting to see the EU as a death knell, one that is suffocating them with austerity instead of supporting them with job-boosting measures.

"We fully understand the sentiments of all Europeans, especially here in Belgium, where we are so close, the frustrations and doubt and the worries," European Commission President Jose Manuel Barroso said.

The question is where to find money to boost growth when debt is preoccupying everyone. The austerity measures raise taxes and cut benefits for hundreds of thousands of workers in Belgium. And Monday's strike has been mirrored in many other member states.

Overall, 23 million people are jobless across the EU, 10 percent of the active population.

"Europe has to offer jobs, social protection and perspective for the future. Otherwise it risks losing the support of its citizens," said the strike manifesto of the ACV union.

For Monday, Thalys and Eurostar bullet trains to Brussels have already been cut, one airport has been closed and Brussels international airport is expecting heavy disruption. Contingency plans have been made to get the 27 European leaders to the center of Brussels, but even then convoys could end up in choking traffic if workers block the capital's beltway during morning rush hour.

No major demonstrations are planned but the union leaders will head to the summit site to deliver a symbolic "eurobond" — pressing for a joint pooling of debt in the eurozone, a measure that has been steadfastly opposed by Germany.

The noise of workers and lack of growth is having a profound impact on Monday's summit.

Even if the debt crisis in Greece will take center stage for part of the meeting, "at the same time, we need to take active measures to enhance growth and competitiveness and above all create jobs," EU president Herman van Rompuy said.

The leaders, though, will be happy to learn that Greece and investors who own its bonds have reached a tentative deal to significantly reduce the country's debt and pave the way for it to receive a much-needed euro130 billion bailout.

Negotiators for the investors announced the agreement Saturday and said it could become final within the next week. If the agreement works as planned, it will help Greece remain solvent and help Europe avoid a blow to its already weak financial system, even though banks and other bond investors will have to accept multibillion-dollar losses.

Still, it doesn't resolve the weakening economic conditions in Greece and other European nations as they rein in spending to get their debts under control.

Under the agreement, investors holding euro206 billion in Greek bonds would exchange them for new bonds worth 60 percent less.

Without an agreement, bankruptcy would loom large for Greece and raise a big question mark over the euro currency shared by 17 nations.

Another divisive issue is a German proposal that debt-ridden Greece temporarily cede sovereignty over tax and spending decisions to a powerful eurozone budget commissioner before it can secure further bailouts.

The idea was quickly rejected by Barroso's Commission and the government in Athens, both insisting the budget remain a national prerogative.

At the same time, the EU also has to deal with an increasingly tough labor market.

Spain's brutal unemployment rate has soared to nearly 23 percent and closed in on 50 percent for those under age 25, leaving more than 5 million people — or almost one out of every four — out of work as the country slides toward recession.

To help jump-start the EU toward more growth and employment, the EU Commission is proposing to the summit leaders to redirect euro82 billion in existing funds toward countries in dire need of help to fix their labor market.