Strike brings Belgium to a halt

Belgian workers block entrances to the airport in a general strike called to oppose austerity measures [AFP]

Trains and public transport are paralyzed across Belgium during a day of nationwide strikes to protest austerity measures that have in part been imposed through European Union pressure.

Hours before the start of Monday’s European Union summit in Brussels that aims to seek more growth and jobs, Belgium’s three main unions served warning that efforts to reinvigorate the European economy should center on taxing
multinationals instead of slashing public services and imposing a pension reform that forces people to work longer and cuts payments in some cases.

One airport was closed and Brussels international airport suffered cancellations, delays and diversions. Traffic delays were limited since many people either worked from home or took a day off.

Belgian rail workers launched the strike late on Sunday, with the first trains stopped turning around 9:00pm local time (2000 GMT), travellers said on Twitter.

High-speed international train services, such as the Eurostar from London and Thalys from Paris, were not running into or out of the country from late on Sunday.

Rail authorities have warned passengers that it could be Tuesday afternoon before the network is functioning normally again.

The Belgian government arranged fallback emergency access via a military airport for EU leaders who needed private landings.

Public sector deficit

Monday’s industrial action is the country’s first general strike since 1993 over government plans to raise the effective retirement age along with other measures designed to save $14.84bn.

The government also froze 1.3bn euros of spending at the start of the year after a warning from the European  Commission that it was not on track to meet its targets.

Belgium has pledged to bring its public sector deficit below the EU limit of three per cent of gross domestic product this year to avoid an EU fine and to reassure investors that it has its finances under control.

The EU leaders will sign off on a permanent rescue fund for the eurozone and are expected to agree on a balanced budget rule in national legislation.

Credit agency Fitch followed Standard & Poor’s and Moody’s on Friday in cutting Belgium’s rating with a negative outlook, citing concerns of a worsening debt crisis and a recession that could undermine the commitment to reform.

Stagnation ahead

Belgium’s government already knows growth this year will be below the 0.8 per cent assumed for the budget drawn in December.

A likely stagnation or contraction will force it to seek further savings when it revises the budget next month. Economists estimate it will need to find an extra 1.5bn to 2bn euros.

The battle lines are already being drawn for that debate, with the French-speaking Socialist Party of Elio
Di Rupo, the prime minister, insisting that the rich should bear a greater burden with higher rates of tax on capital.

Pro-business Liberals and centre-right Christian Democrats, also in Di Rupo’s six-party coalition, say higher taxes would
push the country into a recession and that government spending can and should be cut more.

Union leaders say they fear the government might be tempted to suspend its system of wage indexation, the linking of pay to inflation criticised by the European Commission and international economic organisations as driving up prices and
undermining Belgium’s competitive position.

Economists say a single skipping of an automatic pay increase could save the government at least 1bn euros.

For now, many Belgians appear to have accepted the need for austerity measures. According to an opinion poll in top-selling newspaper Het Laatste Nieuws last week, only 21 per cent of Belgians supported the strike.