January 19, 2009 / 12:23 AM / 10 years ago

FEATURE-Riots expose roots of anger on EU's edges

By Patrick Lannin

RIGA, Jan 19 (Reuters) - Standing in the X-ray room of the gleaming private clinic he opened last year, Leons Platacis is an incongruous champion for youths who rioted in Latvia last week, part of a wave of European protests.

The Latvian businessman, who set up the clinic with his doctor wife, said it is managing to grow despite increasingly cautious banks, whose refusal to lend created a cash squeeze that has forced him to lay off five of his 20 staff.

But he is frustrated. Not only with the bankers — now mainly the offshoots of large Scandinavian parents — but also the government of the Baltic state, forced last year to accept a 7.5 billion euro ($9.94 billion) IMF and EU rescue package.

Platacis and others like him in European Union countries from Greece to Bulgaria show how the economic crisis has dashed hopes for prosperity among the middle-classes and young people, compounding resentment of governments already exposed by perceived nepotism, arrogance and corruption.

"We now have a situation like at the end of the Soviet period," he told Reuters, gesticulating as nurses outside escorted visitors along the freshly decorated hallways.

"It is them and us. We are not a united society with a clear vision and leaders we can trust."

The Latvian capital was one of several where youths last week went on the rampage after a peaceful protest against the centre-right government, in power since the start of 2008.

Platacis said he disagreed with their actions but understood their motives.

Riots in the Bulgarian capital on Wednesday followed Latvia’s on Tuesday, and on Friday police in Lithuania used tear gas as people threw stones and bottles at parliament to protest against higher taxes and lower spending.

As in Greece, where two weeks of protests in December forced a government reshuffle, the street demonstrations have been mainly driven by young people angered by entrenched systems which seem to deny them any prospect of progress.

"We protest because we do not like the life in the country, we do not like the government, the whole bureaucracy," said Oksana Cherkishyan, 20, a student in Bulgaria, the European Union’s poorest member and according to Transparency International its most corrupt.

Others are still hoping migration will boost their chances of employment: "My job prospects here are not too good — more likely abroad,"said psychology student Orsolya Voros, 20, in Hungary.

High youth unemployment was a main driver for unrest in Greece, initially sparked by the police shooting of a youth in a traditionally rowdy Athens suburb.

General unemployment runs just above the EU average at 7.4 percent in Greece, but the figure is 21.2 percent for the 15-24 age group and 10.5 percent for those aged 25-34.

"The explosion conceals a compressed desperation," wrote Greek psychology professor Fotini Tsalikoglou in left-leaning newspaper Ta Nea on Dec. 8. "Many young people live with the unbearable knowledge that there is no future."



REPERCUSSIONS SPREAD

And as more jobs go in countries which lack reserves or social infrastructure to help cushion the blow, the anger widens and intensifies.

People in the former Soviet bloc who took out loans in hopes of a new solidity in the ranks of wealthy nations are fast losing sight of their goals of a better life for their children.

"I don’t feel that our situation has got better since we joined the EU," said Hungarian Maria Kovacs, 55, who has a daughter at college and whose country is one of the worst hit in central Europe by the crisis.

Hungary’s Socialist government last year had to take a $25.1 billion loan from the IMF, the European Union and the World Bank and is this year likely to have to cut spending and possibly raise taxes at a time the economy is set to contract.

Lithuania and Latvia, where credit expanded by 50 percent a year in the boom to 130 percent of gross domestic product, most of it in loans to private people, have taken similar measures.

"What we feel is more that along with a deterioration in the economy, our own situation worsens a bit as well, plus this latest crisis adds to it," Kovacs said.

Hungary’s minority government, which in 2006 faced riots stoked by far-right radical groups, has avoided unrest, but for real estate developer Antal Jartas, it needs to do more.

"There is no activity whatsoever to create jobs, aside from proper comments from policymakers," he said.

Some commentators say the social concerns could help extremist groups and parties: Budapest think-tank Political Capital said in a recent report the risks are mounting from new extreme right-wing groups, which focus their dislike on immigrants and the Roma population.

"The social roots of the problem are seen in the poor integration of the Roma population, public security concerns and shaken public confidence in state organisations (the police, the courts and the army)," the report said. (additional reporting by Krisztina Than in Budapest, Anna Mudeva and Tsvetelia Ilieva in Sofia, Renee Maltezou and Daniel Flynn in Athens; Editing by Sara Ledwith)




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