General strike grips Belgium as EU leaders meet

BRUSSELS Mon Jan 30, 2012 9:20am EST

A passenger walks in an empty train station in Brussels during a nationwide strike January 30, 2012. REUTERS/Yves Herman

A passenger walks in an empty train station in Brussels during a nationwide strike January 30, 2012.

Credit: Reuters/Yves Herman

BRUSSELS (Reuters) - Belgium's first general strike in almost two decades brought parts of the country to a halt on Monday in an anti-austerity protest aimed at the new government and at EU leaders meeting in Brussels.

The rail network closed, buses and trams sat in depots, schools and shops shut and production stopped at the factories of many companies including carmakers Audi (VOWG_p.DE) and Volvo, Coca Cola (KO.N) and imaging group Agfa-Gevaert (AGFB.BR).

Charleroi Airport, a hub for Ryanair (RYA.I) and other low-cost carriers, was forced to cancel all flights due to union plans to block the access road.

However, at Brussels airport most flights were running.

"Some airlines cancelled services ahead of time ... but overall I think only about 10 percent of flights will be hit," an airport spokesman said.

High-speed international trains, such as the Eurostar from London and Thalys from Paris, were not running into or out of the country as of late on Sunday.

At Europe's second busiest port, Antwerp, all container and some bulk cargo terminals were shut, with shipping traffic suffering delays due to suspended harbour services.

Congestion on the highways was less than usual, traffic body Touring-Mobilis said, suggesting that people who had decided to work had left earlier, shared cars or chosen to work from home.

The walkout coincides with the 17th EU summit in two years as the bloc battles to resolve its sovereign debt problems. The EU leaders are expected to sign off on a permanent rescue fund for the euro zone and agree on a German-driven pact for stricter budget discipline.

Belgian union chiefs, gathered outside the meeting, urged the EU to issue joint eurobonds to ease the interest pain for weaker nations and said the rich should shoulder more of the austerity burden.

"Europe must hand out eurobonds, it must help the strikers who have bailed out banks and it must take steps for long-term growth," said Rudy De Leeuw, president of the ABVV union group.

Unions have called the general strike, Belgium's first since 1993, over government plans to raise the effective retirement age along with other measures designed to save 11.3 billion euros.

"We are angry because they want to attack our pensions," said Philippe Dubois, a railway union member outside Brussels' Midi station. "We want to make some noise."

BUDGET BATTLE AHEAD

Belgium has pledged to bring its public sector deficit below the EU limit of 3 percent of gross domestic product this year to avoid an EU fine and to reassure investors it has its finances under control.

The government knows growth this year will be below the 0.8 percent assumed for the budget drawn in December. A likely stagnation or contraction will force it to seek further savings when it revises the budget next month.

The battle lines are being drawn for that debate. The Socialists saying the rich should bear a greater burden, while the pro-business Liberals and centre-right Christian Democrats argue higher taxes would push the country into recession and government spending should be cut more.

Union leaders say they fear the government might be tempted to suspend its system of wage indexation, the linking of pay to inflation criticised by the European Commission and international economic organisations as driving up prices and undermining Belgium's competitive position.

Economists say a single skipping of an automatic pay hike could save the government at least 1 billion euros.

For now, many Belgians appear to have accepted the need for austerity measures. According to an opinion poll in top-selling newspaper Het Laatste Nieuws last week, only 21 percent of Belgians supported the strike.

Union chiefs say they will decide after talks with the government over the next two weeks whether to strike again.

(Additional reporting by Ben Deighton and Claire Davenport; Editing by Alison Williams)

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