Banks collapse, stocks markets crash, billions flow to shore up the financial system. Yet Belgians responded to what may be the worst financial crisis in a generation Monday in their own quirky way: by going on strike.
The one-day national strike over rising living costs paralyzed much of the country, with public transport grinding to a halt, including international rail services like the Eurostar. An estimated 190 mi of traffic jams were reported on the motorways by 7:30 a.m. Supermarkets shut their doors, production stopped at factories, and schools, post offices and museums closed across the country.
It seems a bizarre moment to down tools. Belgium's banking sector has just taken a particularly hard hit: the strike comes the day after Belgium's biggest bank, Fortis, was sold to France's BNP-Paribas.
More hand-outs from the public purse looked unlikely in the face of what the government already spent over the past week bailing out both Fortis and another bank, Dexia: a total of $10.6 billion, or almost $1000 per Belgian. "Even before the bank bailouts, the budget was tight and growth prospects were low, so it's hard to see where the money can come from," says Pierre Blaise from the Brussels-based centre for socio-political research (CRISP). "This could also have an impact on Belgium's international reputation."
Such as it is: on top of the strike and the financial crisis, Belgium is still mired in a political mess as French and Dutch-speaking parties squabble over where provincial power ends and national authority begins. The country did with just a caretaker federal government for nine months until March, and the current administration is tenuous at best.
Nevertheless, the call of the union is powerful in this corner of Europe. The main unions have been drumming up support for week for the 'day of action,' which is aimed at securing government compensation for fading purchasing power as energy and food prices climb.
They say ministers have ignored their pleas, and that price inflation is eating into family spending. With Prime Minister Yves Leterme due to unveil his 2009 budget to parliament on October 14, the unions want a signal that some form of relief is on the cards.
The unions say that since the start of the year, food prices have risen 7.9%, electricity 20%, gas 50% and coal for heating 59%. The consumer price inflation rose 5.46% year-on-year in September. They say the government is still offering businesses "expensive gifts" like tax relief to foreign investors, but it has done nothing to relieve creeping living prices. Union demands include for higher minimum wages, a VAT cut on energy bills, and lower income taxes.
Businesses have cautioned that unions are exacerbating an already delicate situation: the FEB/VBO employers' group has warned that Belgium could face a wave of bankruptcies and restructurings in the wake of the financial crisis, and strikes will only make matters worse.
But union representatives complained that the rescue package seemed like a reward for failed bankers. "It's time to think now of the man and woman on the street rather than the banks," said Philippe Vandenabeele, a local leader of the liberal CGSLB/ACLVB union. "We are calling for better purchasing power for workers."
The head of the socialist trade union ABVV-FGTB, Rudy De Leeuw, said that three-quarters of union members were taking home between $1400 and $2200 per month. "If you have to pay your heating, your electricity, your loan payments, etc, there's not much left," he said. "And we are not even talking about the pensioners, the unemployed or the handicapped."
Outside the Brussels stock exchange, union members distributed peanuts, and leaflets saying "Purchasing power: what's left? Peanuts." But as the Belgian government struggles to keep up with the spiralling financial crisis, those peanuts might have to last for a long time yet.