Austerity Movement Threatened As Strikes Spread

Strikes by truckers in France threatened to close major highways and may even disrupt inventories of fuel across the European nation. Officials said they would call out the police, if necessary, to keep the supply of critical oil and gas flowing.

The strikes have begun because the French government plans to raise the retirement age to 62 from 60. The trouble may have only just begun. France’s eight largest unions will meet this week to discuss further action. They could, in theory, close most of the French economy.

The labor movements in Greece, Spain and the UK have already started similar labor stoppages. The cause of all of them is the same. The new-found movement within governments with slow-growing GDP and high deficits toward austerity will gore the oxen of the middle classes. The only way that workers have to combat government moves is to show how quickly they can shutter large portions of the economies of these nations. Then national leaders and parliaments can decide whether the labor movements can destroy GDP growth entirely by freezing the activity of critical parts of their economies.

The labor movements in Europe posses an even more powerful weapon. Like the US unions were able to do 50 years ago, labor in nations like France can take actions to put the current politicians out of their jobs and replace them with more “labor friendly” officials. Then newly elected legislators can go about their work to dismantle austerity programs because that is the will of the people. In the meantime, deficits will almost certainly grow again and political victories will become economic disasters.

The real threat of increased deficits and national debts has shifted from the wills of central banks and administrations and their treasuries to effectively address the problem to one of the political survival of those who support national cost cuts which raise the strong objections of labor. Labor has effectively begun to tip the table in its own direction. If that works, austerity programs will be weaker than what economists say they ought to be, leaving the region’s economic problems unsolved.

Douglas A. McIntyre