Season Of The Strike

Across Europe last week, union members left their jobs and marched. From the teachers and firemen of Britain to the cabbies and doctors of Greece, their demands were much the same: more social welfare benefits, shorter hours, better pay. Angry workers are the last thing European governments need right now. Confronted with sluggish growth and an accompanying drop in tax receipts, finance ministers worry that labor concessions would push budget deficits over E.U. limits. So some politicians are playing it tough, either denying union claims outright or linking them to cost-saving and modernization. Other leaders are caving in, delaying or diluting plans to improve labor market flexibility and reform failing pension systems. How governments respond to this wave of strikes — and other walkouts that are still to come — will help determine how their economies weather the economic slump.

In the rough-and-ready camp are British Prime Minister Tony Blair and his French counterpart, Jean-Pierre Raffarin. Last week Blair offered a deal to state healthcare workers for a pay rise tied to reforms, but refused wage demands by striking firefighters unless they modernize. Raffarin scored an important victory by threatening tough action against strikers who break the law. As a result, industrial action by farmers, truckers and state employees fizzled. In the worried and waffling camp are Italian Prime Minister Silvio Berlusconi — who has hesitated on promises to free up the labor market — and Greek leader Costas Simitis, who risks seeing his country's hard-won fiscal stability damaged by demands from public sector workers. Here's a look at four leaders standing nose-to-nose with the unions.

UNITED KINGDOM
It's an awkward straddle: a Labour government — traditional champion of working people — shoving more money into public services yet struggling to keep a lid on what the workers in those services get paid. Tony Blair's government was facing the biggest labor crisis of its five-year tenure last week as firefighters finished an eight-day strike, some teachers walked off the job for a day and other unions talked of backing the firefighters, who plan another walkout this week if no deal is reached, with strikes of their own.

Blair's government was unusually flat-footed in its p.r., sending out mixed messages through multiple spokesmen. First it appeared to bless a 16% raise, then insisted that any increase above 4% would have to come out of "modernization" savings — reforms like joint control centers for police, fire and ambulance; fire trucks with both full-time and part-time employees; and more flexibility in shift work. But that would mean job losses, so the firefighters were furious, questioning whether Blair was trying to "pull a Maggie" — prove Thatcher-like toughness to win votes.

Blair's goal isn't so much union-busting as long-term political survival. Last week the Chancellor of the Exchequer, Gordon Brown, announced that the government had to borrow $31 billion this year because the slowing economy is depleting tax receipts — the first big blot on his record of fiscal wizardry. Unless the economy rebounds, that number may well have to grow. A big raise for the firefighters (they are seeking a whopping 40%) would set a costly precedent for other public employees. If the government starts doling out that kind of cash, money would have to be taken away from its core goal of improving hospitals and schools in tangible ways by the next general election — either that, a tax hike or more borrowing. "We have been met, I am afraid, by a claim that is unreasonable," said Blair, "and if we yield to that claim then the consequences to the rest of the economy are absolutely dire."