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Thursday, February 25, 2010

Europe Goes on Strike

The Wall Street Journal
On Wednesday, a union-backed general strike shut down Greece. Roughly a million workers protested their government's plans to bring its 12.7% budget deficit under some semblance of control. Shipping, air traffic, trains, schools, and numerous private industries ground to halt. In the one country that can least afford to put an economic gun to its own head, the unions have decided to pull the trigger.

Nor were Greek workers alone. In Spain, tens of thousands of union members and fellow-travelers rallied in the streets. In France, air-traffic controllers and refinery workers have walked off the job. In Germany, a brief strike by Lufthansa pilots has left Europe's airports even more clogged than usual. Only in the U.K. do British Airways' cabin-crew members remain coy as to when exactly they will bring operations to a grinding halt.
What accounts for this Continent-wide outbreak of unrest at a time when Europe's economies can so ill-afford it? Call it the welfare-state mentality coming home to roost. For decades, European workers have been told that somebody else will provide for them. You want a shorter workweek? Paris is here to help—along with a laughable promise that the 35-hour law will reduce unemployment. Are fuel prices too high? Here's a subsidy, extracted from excise taxes that account for more than half the cost of other people's gas. You want more vacation, longer and better-paid family leave, more generous benefits? Your employer surely has the necessary funds stashed away somewhere or other.

In Greece, one union representative gave voice to the general mentality. "We understand the difficulties in the economy, but the average worker can't give anything more," said Stathis Anestis, a spokesman for a private-sector umbrella union. "If the EU wants more measures [to improve Greece's finances], the rich and those who evade taxes should pay for it."

Mr. Anestis is right that Greece has a serious tax-evasion problem. But it's equally clear that Athens has made promises to its public-sector employees that it cannot afford to keep even if it were to collect every euro cent owed to it by every tax cheat.

In a different world (or on a different continent) the anger and frustration now being vented on Europe's streets would be directed at government policies that have led to economic stagnation, anemic or nonexistent private-sector job creation and a welfare state that in many countries consumes half of all economic output for distribution to others. But a statist mentality has become so entrenched that few people even think to ask for greater freedom to provide for themselves. They demand, instead, that someone else provide for them.

This mindset is not immutable. It's the product of economic and political arrangements that tax the fruits of success at 50% and more. Change the incentives and you change the mentality. The question is whether there's a politician anywhere on the Continent willing to offer his countrymen a better bargain than welfare, unemployment and unrest.