Labour unrest, protests mount in southern Europe

Fri Oct 19, 2012 11:57am EDT

* Protests return after summer lull

* Governments looks secure for now except Portugal

* Situation volatile, could change in medium term

By Daniel Alvarenga and Karolina Tagaris

LISBON/ATHENS, Oct 19 (Reuters) - After a lull during the summer, street protests and strikes are mounting again in the debt-laden countries of southern Europe as harsh austerity programmes cause ever more pain.

But with the possible exception of Portugal, where months of quiet resignation have changed to anger, the unrest seems unlikely in the short term to topple governments more in thrall to market forces pushing for debt cutting than domestic opposition.

The readiness of southern populations to take much more pain is diminishing, however, and the situation could change quickly.

"I don't think we have seen nearly the amount of social unrest that we will in the next 12 months or so," said Megan Greene, an analyst at Roubini Global Economics.

"Six months in the euro zone crisis is a pretty long time ... there has been more austerity, so the economy is in worse shape in each of these southern countries and the goodwill amongst the public for taking these measures on the chin has dwindled."

The Portuguese showed a remarkably high level of acceptance for cost cutting after Lisbon took an international bailout in 2011, but that mood has changed dramatically in recent weeks and support for the centre-right government is crumbling.

Trade unions in both Spain and Portugal have called a general strike for Nov. 14 against policies that have hiked unemployment and plunged the two countries deeper into recession.

It will be the first time in Spanish history that two general strikes have been held in the same year.

In Greece, which sparked the euro zone debt crisis in 2010 and where there have been two general strikes in the last three weeks, unions have vowed to join the Iberian stoppages.

Greece has always seen the more dramatic opposition to austerity with occasional pitched battles between protesters and riot police in central Athens.

There were more clashes with protesters throwing stones and petrol bombs during the latest strike on Thursday when 40,000 people took to the streets.

WEARY RESIGNATION

But the appetite for sustained protest has been replaced by weary resignation among people struggling to get by in the face of soaring unemployment and shuttered businesses in the worst downturn since World War II.

The number of protesters in Athens on Thursday was less than half the 100,000 who camped outside parliament in June last year.

"There is a sense of surrender to the current situation, which is bad, but also toleration of it for fear of something much worse," said Theodore Couloumbis, vice president of the ELIAMEP think tank.

Unlike most Mediterranean countries, Spaniards protested right through the summer and the average number of demonstrations has risen to six a day in Madrid, one of the highest levels in Europe.

A recent survey showed 77 percent of Spaniards support the protesters and Prime Minister Mariano Rajoy's popularity has fallen to under 30 percent from nearly 45 percent last November when he won a landslide election victory.

That win gave him a powerful parliamentary majority that insulates him against protests although he needs to convince uneasy investors he can keep a lid on social unrest.

Rajoy is more troubled by regional elections in Galicia and the Basque country this weekend and then in Catalonia next month, when he may be punished for his unpopular handling of a crisis which has brought the highest euro zone unemployment outside Greece, tax hikes, spending cuts and a bailout for Spain's troubled banks.

RESCUE PACKAGE

With Spain at the centre of euro zone concerns, Rajoy is expected to finally accept a euro zone rescue package in November to prevent the country's borrowing costs becoming untenable.

Of all the Mediterranean countries, Italy has seen little serious street unrest or strikes, with technocrat Prime Minister Mario Monti somewhat insulated until elections next spring by a broad parliamentary coalition that includes the union-backed centre-left Democratic Party.

Despite constant criticism and a vague threat of a general strike from the largest, leftwing CGIL union confederation, Monti has been little troubled by labour protest. But the CGIL will hold a day-long protest rally in Rome on Saturday.

Portugal bucked the trend in other southern countries when its long acceptance of austerity measures imposed by international lenders suddenly turned to anger and protest in September after a bungled government attempt, since abandoned, to raise social security contributions.

To compensate, it announced sweeping income tax hikes and thousands have taken to the streets to demonstrate, raising fears the coalition could split under the pressure.

The junior coalition partner, the CDS party, has vowed to support a budget that includes the steepest tax rise in Portugal's democratic history in a parliamentary vote on Oct.31.

But the Social Democratic-led government of Prime Minister Pedro Passos Coelho still looks fragile as protests grow.

"The protests are in a crescendo and very significant. The criticism is general and comes from the streets, opposition, former politicians and even from within the government itself. They are under a lot of pressure," said Marina Costa Lobo, a political scientist at the University of Lisbon.

FILED UNDER: