By Sean Healy
BRUSSELS—Plans by Belgian Prime Minister Jean-Luc Dehaene for a social pact with the trade unions to enforce austerity suffered a major setback when 100,000 protesting workers took to the streets on October 29.
The demonstration, held in conjunction with a 24-hour general strike which paralysed the country, was called by one of the two main union confederations, the Belgian General Workers' Federation (FGTB), after it pulled out of negotiations with the government. The protest is the most serious and militant challenge in Dehaene's three years as prime minister.
The social pact, put forward in August by the coalition Social Christian Party and Socialist Party government, proposed a three-year wage freeze, increases in taxes on alcohol and tobacco, decreases in payroll tax and large-scale cuts in social welfare. The success of the pact is crucial to Belgium's attempts to fulfil the criteria for European monetary union.
These criteria, laid out in the 1992 Maastricht Treaty, require governments to reduce their budget deficit below 3% of the gross domestic product and public debt to 60% of GDP. At present, Belgium's deficit is 6% of GDP and its public debt 120% of GDP.
Further austerity, after years of assault on Belgium's social welfare system, is sure to further undermine that system, one of Europe's best, as well as increasing unemployment levels (presently 14.1%) and widening the wealth and income gaps.
Between 1982 and 1992, while gross national product rose 24%, the incomes of the working class fell by 13%, incomes of the rich rose by 37% and incomes of enterprises rose 75%. Over that same period, the budget deficit as a percentage of GDP decreased from 10% to the current 6%.
In March, the Dehaene government bought down a budget which imposed 99.5 billion francs in cuts (roughly A$5 billion) and a loss of 7000 jobs.
The purpose of the social pact is to build an enforceable "consensus" behind such measures.
The mass protest is certain to lead to a rapid redrawing of the terms of the austerity package by the government, though the pact's essential nature is unlikely to change.
More importantly, the mobilisation of the FGTB will put considerable pressure on the second major trade union confederation, the Social Christian CSC, to follow the FGTB in pulling out of the negotiations and opposing the terms of the pact.
At the same time, however, the FGTB is yet to proclaim opposition to the social pact as such rather than just the terms. Its policy on Maastricht is opposition to austerity but support for a "social Europe" — an ambiguous concept at best.
While the FGTB has been exercising a great deal of independence from the Socialist Party through the 1980s, its official leadership remains closely tied to the party. A reworked social pact may yet be welcomed by the union.
The same indecision can not be attributed to the FGTB's rank and file, whose anger at the very idea of a pact between their union and the government has been very clear. The chants of choice at the mass protest were, "No social pact, no global plan, general strike", and "Pact in the fire, bosses in the middle of it".
This outbreak in Belgium is part of an unprecedented wave of anger Europe-wide against austerity and its effects, anger that has provoked considerable concern in government and media circles. The recent two-week strike at Air France, which led to a humiliating government back-down, even raised the spectre in the media of a social explosion a la Paris 1968.