Yellow Vests, Italian Budget Battles and Silent Labor Unions

Yellow Vests, Italian Budget Battles & Silent Labor Unions

French protesters are furious with EU champion Emmanuel Macron while Rome battles Brussels over its budget. Amid all this, Andrew Spannaus discusses why organized labor isn’t seizing the moment. 


Special to Consortium News

From the European Union’s standpoint, the historic levels of social unrest confronting French President Emmanuel Macron, one of its leading champions, came at a delicate moment in its dealings with Italy.

Since mid-September, the European Commission, the EU’s executive body, has been battling with Italy over its budget. The populist government in Rome—led by the Five-Star Movement, orM5S, and the League—have decided to stimulate the economy by giving money to the poor, lowering taxes and increasing public investment.

With an assist from financial markets that are penalizing Italian government bonds, the Commission has been threatening an “excessive deficit procedure” if Italy doesn’t reduce spending and resume measures to balance its budget. In theory this austerity policy will make the country more stable and efficient. But the last 10 years have demonstrated that cutting the budget and raising taxes have depressed economic activity, with the effect of making people poorer. Italy’s new political leaders are determined to show they can break through the resistance to public stimulus of the economy.

Protesters in Paris flee tear gas, Dec. 8, 2018.  (O.Ortelpa on Flickr)

The French Yellow Vest protests came just in time to alleviate some of the pressure on the Italians, allowing the M5S and League leaders to point out the hypocrisy of letting France run a budget deficit of over 3 percent (ER: because it is responding to some of the Yellow Vests’ economic demands) while pushing Italy to go below 1.5 percent. “If the deficit/GDP rules apply to Italy, I expect they should apply to Macron as well,” Italian Deputy Prime Minister Luigi Di Maio said on Dec. 11, Reuters reports.

The response from pro-austerity factions within Italy and the European Commission is that Italy has a larger public debt and benefits from less market confidence.

EU Tries to Hold Line

Nonetheless, the European Commission showed a bit of flexibility this week, provisionally accepting a budget deficit of slightly over 2 percent. The Italians also ceded ground by reducing investments and the funds allocated to their signature projects to alleviate poverty and help pensioners. Thus the European Commission is still fighting to defend its line of budget orthodoxy, lest the floodgates open to uncontrollable rebellion.

Where are the unions?

In France, union membership is very low, but the unions there still have considerable power in collective bargaining and have demonstrated the ability to paralyze the country, at times more so than in Italy, where membership is much higher. France’s unions, however, do not seem to be identifying in any major way with the discontent, although there have been some sightings. The reports that “France’s biggest union coalition, the General Confederation of Workers, called for a day of general mobilization on December 14, and in some regions, like Ile-de-France, this garnered support from other unions and federations.”

But given the EU’s embrace of austerity policies and “labor flexibility”— meaning the ability to fire people more easily and keep wages low—organized labor isn’t taking the central position against the effects of globalization that might be expected. Unions have been mostly absent from the spontaneous protests in France and the rising populist movements in Italy and elsewhere around Europe.

Protecting Institutions

The dilemma for some unions is that while they aim to defend workers by battling wage and benefit cuts that are justified by the need to compete on global markets, they fear feeding populist movements that might challenge the legitimacy of European institutions and the politicians who back them.

Protesters at the Champs-Elysee in Paris, Nov. 24, 2018. (Wikimedia)

An example of this contradiction comes from Italian labor leader Susanna Camusso (pictured), head of the Italian General Confederation of Labour, or CGIL, the country’s largest union, dating back to 1906.

In an interview with foreign journalists in Milan on Nov. 19, Camusso focused on unstable working conditions that force workers to accept multiple short-term contracts that offer no job security. She also raised some broad demographic inequities: between young and old, men and women, and different geographic areas.

But when asked if organized labor was wrong to have supported the EU economic policies from the start—by not opposing the budget rules at the root of current demands for spending cuts—Camusso denied any culpability. “We are pro-European and continue to be convinced supporters of Europe,” she said. “Our country made sacrifices affecting workers, but joining the monetary union and the Euro was the right choice. Not only because we are a founding country, but because Europe has meant peace for many years.”

This is the type of argument that voters across the continent are increasingly rejecting: the notion that calling for a fundamental change in EU policies automatically means a return to the wars of past centuries.

Free-Market Europe

It is indisputable that cooperation has helped bring European nations together since the end of World War II, yet it is also clear that the neoliberal policies introduced in the 1990s, starting with massive budget cuts and the opening of numerous sectors to speculative capital through privatization and liberalization, changed the nature of Europe, cementing the power of the “free market,” pro-globalization consensus that has produced negative effects for so many.

Camusso, who is also a candidate for secretary general of the World Federation of Trade Unions, does not shy away from criticizing the difficulties created by such policies. She attacks austerity policies that reduce pensions, cut funds for health care and erode public infrastructure. Yet by refusing to admit the neoliberal foundations of EU policies starting at least 25 years ago—policies based on monetary parameters, rather than the health of productive activities in the real economy—she ties the unions’ hands in fighting for more decisive change.

While organized labor restrains itself, both right- and left-wing populists take the helm on EU economic issues, many claiming they are not anti-European as such, but merely determined to stop the austerity policies that have done so much harm to the population.

This was seen in the French presidential elections in 2017, when both Marine Le Pen, on the Right, and Jean-Luc Mélenchon, on the Left, called for renegotiating the EU treaties to abandon the notion of “free trade” that has harmed the productive economy.

In the 2016 U.S. elections, a partisan shift in votes from union households was a critical factor in President Donald Trump’s victory in key battleground states such as Ohio and Michigan.

The underlying issues driving the populist revolt are economic and financial globalization and their effects on people’s living standards. Shying away from criticizing the neoliberal policies ingrained in Western institutions is merely a recipe for further unrest, with potentially dangerous consequences.

When Macron came from seemingly nowhere to defeat Le Pen in the May 2017 run-off, he became the youngest president in French history. He was hailed as the savior of the European Union, a centrist who succeeded in beating back the populists. As such, he came to symbolize the idea that the EU defends peace and democracy against the racists and xenophobes. But the spontaneous insurgency of the anti-establishment Yellow Vest movement suggests the real threats to social stability are the sheer hardships—and loss of living standards—suffered by large numbers of people.


Original article

ER recommends other articles by Consortium News

Andrew Spannaus is a journalist and strategic analyst based in Milan. He was elected chairman of the Milan Foreign Press Association in March 2018. He has published the books “Perché vince Trump” (“Why Trump is Winning” – June 2016) and “La rivolta degli elettori” (“The Revolt of the Voters” – July 2017).