Discontent Rises in Europe as Economic War With Russia Pushes Up Cost of Living (from WSJ.com)
~Saturday, October 29, 2022 Blog Post~
Governments fear protests against high energy prices could weaken public support for Ukraine
By Bojan Pancevski and Noemie Bisserbe
Updated October 27, 2022 10:01 am ET
A wave of protests triggered by rocketing living costs and a looming recession is sweeping across Europe, testing the resolve of governments that have so far maintained unity in their costly economic war with Russia.
The public backlash against high prices for electricity and heating as temperatures begin to fall is also fueling tensions between European capitals over richer nations’ larger relief packages, which poorer neighbors say are distorting the market and compounding the crisis.
On Thursday, thousands of people took to the streets across France to demand higher wages. Striking teachers, railway and health workers staged marches in dozens of cities, including Paris, snarling traffic and disrupting public transport.
PHOTO: BENJAMIN GIRETTE/BLOOMBERG NEWS
In Belgium, the Czech Republic, Hungary and Germany, tens of thousands have marched in recent weeks, demanding pay rises to offset inflation, more state support, government intervention in the energy market and, in some instances, an end to sanctions against Russia.
Despite measures to support households and businesses totaling 264 billion euros, equivalent to $266 billion, according to Brussels-based think tank Bruegel — by far the largest such package in Europe — Germany has seen weekly protest rallies since the end of the summer, many of them concentrated in the country’s former communist east.
Popular support for Ukraine remains high across Europe and the protests in France haven’t targeted Paris’s Ukraine policy. Yet demonstrators in eastern Germany have been more political, demanding an end to Western sanctions against Russia in a warning to Europe about the political risks it could face should Moscow’s war on Ukraine drag on.
PHOTO: THIBAULT CAMUS/ASSOCIATED PRESS
The unrest in Germany’s east partly reflects old regional grievances and a local political culture that has long cultivated affinities with Russia. A solid majority of German voters still strongly support Kyiv and the Russia policy of Chancellor Olaf Scholz’s government, according to recent polls.
Centrist political parties, unions and civil-society organizations have largely steered clear of the anti-sanctions protests in the east. But the Alternative for Germany, or AfD, a far-right, pro-Russia opposition party and organizer of some of the protests, has benefited from the mood. Its ratings have risen from 10% at the time of the invasion in February to 15%, according to Politico’s aggregate of polls, its highest in almost three years.
The German protests have so far been widespread but comparatively small. Yet some moderate parties and union leaders have begun organizing rallies in the rest of the country to demand more state aid for people, in a sign that economic discontent — if not opposition to supporting Ukraine — is spreading despite the government’s relief measures.
“This is merely the silence before the storm — the discontent is great, and people do not have any sense that the government has a plausible strategy to master the crisis,” said Manfred Güllner, head of Forsa, a pollster.
PHOTO: MATTHIAS RIETSCHEL/ZUMA PRESS
Nine percent of Germans say Mr. Scholz has a coherent strategy to overcome the energy crisis, Mr. Güllner said, at a time when three quarters of all households are trying to reduce their consumption of electricity and heating. The AfD is now attracting voters from all established parties as well as traditional nonvoters, he added.
“Different far-right groups are trying to recruit people at the rallies, and this is what worries me,” said Georg Maier, interior minister of Thuringia, an eastern German state.
While government subsidies will cushion the impact of rising energy prices on households and small businesses, many manufacturers have throttled production because of rising costs. German chemicals giant BASF SE said Wednesday it would scale down permanently in Europe while adding new production capacity in China and elsewhere.
The German economy is facing a difficult winter, said Clemens Fuest, head of the Ifo Institute, an economic think tank that advises the government. Every fourth company is considering layoffs and the prospect of permanently high energy prices is forcing industrial investors to consider whether it is still sensible to invest in Europe, Mr. Fuest said.
In France, President Emmanuel Macron on Wednesday pledged to extend measures against inflation and said some workers’ demands for higher wages were legitimate. Paris has spent €71.6 billion on measures to limit fuel, gas and electricity price increases, according to Bruegel. The measures meant France has recorded lower inflation than the U.S. and most of Europe. Still, rising food prices are taking a toll on France’s low-income families. Inflation stood at 6.2% in September, according to French statistics agency Insee.
Most French people support sanctions against Russia and weapons deliveries to Ukraine, according to surveys. But Mr. Macron and other European leaders fear the economic stress could undermine public support for these policies or the governments that back them.
Nurses and other public-sector workers struggling with inflation might not understand why the government can’t afford to raise their pay when it can send hundreds of millions of euros in military equipment to Ukraine, one French official said.
Last week, more than 100,000 people took to the streets across France, joining protests initiated by refinery workers. Unions have been striking at refineries and fuel depots, choking supplies nationwide and hobbling the country’s refining system. The government stepped in this month, ordering some workers to return to work and invoking rarely used legal powers to secure fuel supplies.
Two of France’s largest unions, CFDT and CFE-CGC, have reached deals with Esso and TotalEnergies SE. But the leftist CGT union slammed the door to talks. The strike continues at two refineries, and many gas stations remain out of stock, notably in the Paris region.
Unions are calling for new nationwide protests on Nov. 10.
Write to Bojan Pancevski at bojan.pancevski@wsj.com and Noemie Bisserbe at noemie.bisserbe@wsj.com
References:
https://www.wsj.com/articles/eu-proposes-new-sanctions-on-russia-11664375406?mod=article_inline
