Business, Economics and Jobs

What London and Athens have in common


Thirteen leaders of the United Kingdom's public sector unions hold up placards displaying the figure 19 billion pounds ($26.5 billion), which is the tax revenue avoided by U.K. banks, in front of Parliament on Oct. 19, 2010 in London, England.


Oli Scarff

LONDON, United Kingdom — British Prime Minister David Cameron held a rare press conference Tuesday and inevitably the euro crisis came up. "Britain suffers when Europe struggles," he said.

A Greek default would have a serious impact on French and German banks, which hold an awful lot of Greek debt. This would slow down Europe's recovery. As Britain's largest export market is the euro zone, that would certainly hurt the barely growing British economy. But while Britain shares the problems of Greece's debt crisis, Cameron insisted it would not be part of the solution — that's for the euro zone to handle.

Ironically, British leaders are about to face some of the same problems as their Greek counterparts. Just as Greek public sector workers have come out to Syntagma square to protest against layoffs — one in five will lose their jobs — and cuts to their wages and pensions, British public sector employees are planning sustained strike action to stop Cameron's government from imposing similar changes.

While Cameron was meeting the press, Unison, with 1.3 million members the country's largest public sector union, was holding its annual conference in Manchester. Unison Secretary-General Dave Prentis was in fiery mood. "We will strike to defend our pensions," he told the delegates. "We will negotiate. But we will prepare for the worst." Over the weekend, Prentis threatened the biggest work stoppage since the General Strike of 1926, when more than a million workers across Britain participated in a strike in support of miners.

The union leader paid tribute to union leaders from Ireland, Spain, Portugal, Italy and Denmark who were in attendance. A consensus is developing among unions across the continent that their members are being made to pay for the mistakes of bankers — and they are not willing to do it.

"We know who the enemy is. It’s the bankers who crashed our world," Prentis told the delegates. He urged Cameron to "go back to the banks, the spivs, the speculators, and tell them on our behalf, 'you created this mess — you clear it up.'" Prentis added, “If there’s money to bail out the banks, if there’s money to protect their bonuses. If there’s money for war ... there’s money available for our local services and our NHS. If there has to be a pay freeze, make it for the bankers, get them to do more for less."

And to show that he supports no particular party he had a spare drop of vitriol for Labour's Shadow Chancellor of the Exchequer, Ed Balls, who has called on the unions not to fall into a trap by going on strike. "When we want your advice, Ed, we'll ask for it." Warming up he added, "In future we will only support Labour candidates who support our values, our people and our union."

Prentis was not manufacturing anger in the hope of bringing external pressure into the negotiations. He believes the public will support his members if they fight the political establishment made up of the Conservative, Liberal Democrat and Labour parties. That is one of the lessons of the on-going turmoil in Athens.

It isn't clear how much the British public shares the Greek public's anger although the letters page of Tuesday's left-leaning Guardian newspaper ran some notes of sympathy:

Tom Burden from Leeds wrote, "Wealthy Greeks have always treated the country's tax system like the church collection plate: what they give is strictly optional. This gap was covered up for as long as the Greek state could get cheap credit ... .Our situation is similar. In Britain, both personal taxation of those on high incomes and company taxation could well be described as "optional."

Peter Robbins of London noted, "Why must we rely on protesters to brave police batons and tear gas to point out the blindingly obvious; that solutions to these problems lie outside the politicians' daily offerings of yet more versions of the status quo?"

That may be the most insightful comment of all. If there is a solution to the economic crisis it is probably beyond the imagination of the political technocrats who have control of national economies in Europe — and the United States. By focusing exclusively on numbers — the deficit, interest rates, inflation rates and actuarial tables of life expectancy — and not on people, politicians and their allied think-tankers may end up creating solutions that work in computer models, but not in that quadrant of reality where human beings live.

Politicians and their advisers are in danger of losing public support in much of Europe because they have failed to reform the financial services industry and tax the massive bonuses bankers have been paying themselves. That just doesn't seem fair. One of the biggest differences between European societies and American society is that economic fairness is still an important part of the unwritten social contract here. Maybe the experience of mass death and destruction from 1914 to 1918 and from 1939 to 1945, followed by the partition of the Cold War, has made Europeans believe that stability lies in a sense of economic fairness because in an unfair world people turn to extremist ideologies.

The absence of fairness may provide a bit of sympathy for British public sector workers as they prepare for strike action — the first is scheduled for June 30 when teachers will walk out for one day.

But even those who think the workers have a grievance are not sure that striking is the way forward. "Unions should play it smarter," said Guardian political columnist and assistant editor Michael White. He points out that talk of the General Strike of 1926 is especially foolish as it collapsed in failure after eight days. White thinks leaders like Prentis overestimate their support. "Most people think their members have a better deal than those in the private sector — it's the public sector which doesn't realize its luck, even if the luck is about to get a haircut."

Playing it smart doesn't seem to be in the cards, though. People are angry, strikes seem likely to return to the foreground of British life in a way that hasn't been seen since Margaret Thatcher was challenging unions to go ahead and make her day.

And if Europe continues to struggle while that is happening, Cameron will definitely suffer.