European Workers Fight Shredding Of Safety Net

by David Bacon

(PNS) BERLIN -- Europe's war between unions trying to protect the remnants of the welfare state and governments bent on shredding them further is no longer a simple war of left versus right. In Italy and France, labor federations are defying the right-wing Berlusconi and Chirac governments. But in Germany, unions are fighting with the party they themselves created, and its chancellor, Gerhard Schroeder.

From Paris to Stockholm, from Berlin to Rome, European governments want to cut payments to retired workers and ask people to work longer. They want benefits to the unemployed to drop as well, even as unemployment rates average over 8 percent in Germany and 10 percent in Italy.

But workers -- and voters -- are fighting the proposals. In France, Chirac's party suffered a devastating loss in local elections in March, due in large part to its own reform proposals. On April 4, half a million protested in both Berlin and Rome. Smaller numbers demonstrated in France and other German cities. For the first time, unions coordinated demonstrations in a multi-country response.

In front of the Brandenburg Gate in Berlin, thousands of workers created a sea of red flags and banners, carrying the symbols of IG Metall, the German industrial federation, and Ver.di, the social services and public sector union.

On one hand-lettered sign, the abbreviation of the Social-Democratic Party, which in German is SPD, was given another meaning: Social Plunder Party. Another sign made an ironic comparison between the death benefit Schroeder's relatives will get when he dies -- about 20,000 euros ($25,000) -- and the average benefit a worker's relatives receive, about 500 Euros ($625). Schroeder's Agenda 2010 reform package would cut this benefit. A third banner demanded that well-paid university economists, who provide the scholarly justification for cuts, take the medicine they prescribe for those further down the salary scale.

The most common handmade sign had no slogan, just an extended middle finger with Schroeder's name on the palm.

"We're fed up with so-called reforms that we pay for, but which benefit others," Jurgen Peters, head of IG Metall, said at the protest.

Wolfgang Mueller, a union representative for IG Metall in the high tech industry, explained the anger. "In Germany right now, the so-called welfare state is being destroyed. It started a long time ago with minor cuts. Now the Red/Green government is starting to do real damage, with big cuts."

German labor is still politically strong, representing 28 percent of the country's workers (in contrast to 12 percent in the United States). Workers in Germany's equivalent to Silicon Valley are unionized. In plants belonging to both U.S. corporations like Hewlett-Packard and big German semiconductor and equipment producers like Infineon and Siemens, companies must bargain with a vocal and organized workforce. High-tech workers from Munich and southern Germany were well represented in Sunday's demonstration.

An articulate man in his early 40s, Mueller waves his arms angrily when discussing the government. "We elected Mr. Schroeder, not management," he insists. "Schroeder won for two reasons. First, he was against the U.S. war in Iraq. Second, he promised to secure the welfare state, especially for the lowest-paid people. Now he is betraying this second set of promises."

Unions say Agenda 2010 hits hardest at the poorest and most vulnerable. Under present German law, companies that lay off workers have to select those with few years of service, or who don't give care to relatives and children. Schroeder proposes to allow companies to use a more subjective, "performance-based" criteria. Current unemployment benefits, which are much less than a normal working wage, last for 32 months. Schroeder proposes to cut them to 12 months.

The biggest proposed change for workers is in sick pay. Under current law, employers pay the first six weeks of illness. Then a social security system pays 80 percent of lost wages for as long as the illness lasts. That system is financed by workers, who pay 1 percent of their salary for it. Schroeder proposes to require workers to buy private insurance to cover these payments, if they can. Workers are incensed, saying they've already paid for these benefits over the years.

"Schroeder promises that with these reforms there will be more jobs, but experience shows there is no relation between cuts in social security and higher employment," Mueller says. "On the contrary, workers will be forced to save money to cover these risks, which will cut consumer spending. The reforms will deepen our economic recession."

Schroeder has told the press that not only will he not withdraw Agenda 2010, he will resign if dissenters in his own party derail it. Yet since proposing it, the SPD's popularity has dropped. The next national election is scheduled for 2006, but were it held now the party would likely lose. It faces 13 regional elections this coming year, and may even lose SPD strongholds like North Rhine/Westphalia, where it has governed for 39 years.

Schroeder's advice to Germans in a radio interview the day before the demonstrations was to stay the course. "When you organize a reform process, you have a problem," he said. "The burdens become apparent immediately. The positive effects will come later."

Workers, Mueller says, don't believe it. "They think Schroeder's a liar," he says.