Europe's Economic Protests May Be Contagious

People demonstrate in Paris. i i

hide captionPeople demonstrate in Paris on Jan. 29 during France's first major strike triggered by the global financial crisis.

AFP/Getty Images
People demonstrate in Paris.

People demonstrate in Paris on Jan. 29 during France's first major strike triggered by the global financial crisis.

AFP/Getty Images
Protesters are surrounded by police in Iceland. i i

hide captionProtesters are surrounded by police during a weekly demonstration against the country's financial situation in Reykjavik, Iceland, Jan. 20.

Halldor Kolbeins/AFP/Getty Images
Protesters are surrounded by police in Iceland.

Protesters are surrounded by police during a weekly demonstration against the country's financial situation in Reykjavik, Iceland, Jan. 20.

Halldor Kolbeins/AFP/Getty Images

As the global economic downturn sinks in, some people in Europe are expressing their economic pain in the form of strikes and protests.

Trade unions in France staged a daylong nationwide protest on Thursday to demand more government action to help ordinary people. In recent weeks, demonstrations have spread from the Baltic to the Balkans.

The protests come as world political and business leaders meet with top economists in Davos, Switzerland, to discuss the crisis.

Anger Over Bailouts

Joseph Stiglitz, the winner of a Nobel Prize in economics, says he is sensing anger over bank bailouts and economic-stimulus packages, even at a business-friendly gathering such as Davos.

"What gets people clapping in this audience," he says, "are complaints about the lack of accountability and calls for punishment of the people responsible [for the financial crisis]."

Stiglitz, a professor at Columbia University, says the protests should come as no surprise, given the widespread perception that governments are bailing out the banks and financiers who caused the financial problems in the first place.

"People see a set of gross inequities," Stliglitz says. "The banks that are getting all this money are the guys that caused the problems." Meanwhile, he says, people hear their leaders talking about cuts in teacher salaries and social programs.

In France, hundreds of thousands of workers marched to demand that the government of President Nicolas Sarkozy do more to protect jobs and wages. Labor leaders accused the government of rescuing banks at the expense of ordinary workers.

Farmers in Greece have blocked roads for more than 10 days as they call on the government to compensate them for tumbling agricultural prices. In Bulgaria, protesters rallied to demand government reforms to deal with the economic crisis. Earlier this month, riot police were called out to quell protests against government wage cuts in Latvia and Lithuania.

And protests in Iceland caused the collapse of the country's government.

U.S. May Not Be Far Behind

Mark Weisbrot, co-director of the Center for Economic and Policy Research, says similar protests could erupt in the U.S. as the economic situation gets worse.

"It's amazing that people aren't more angry here," he says. "Our government is still looking out more for the banks and the people who caused the mess than the people who are being victimized."

Weisbrot notes that there have already been protests in the U.S., albeit of a different kind, and he says they were effective.

"You had people flooding their congressional offices with phone calls, and that forced [the government] to amend the recovery package in the first place," he says.

Weisbrot says that economic pain could erupt into street protest "if you get unemployment like we had in 1982, where it hit 10.3 percent. I don't think people would accept that now."

He also says he thinks protests can move government policy.

"This is a situation where all the governments recognize the severity of the crisis, and they recognize that the government is really the only sector that can deal with it, especially in the United States, where the savings rate has collapsed — and you can't possibly have a consumption-driven recovery," Weisbrot says.

Protests can make political leaders listen, says Professor Stiglitz.

"Too often in our democratic process special interests have driven the agenda. It may be, unfortunately, that these protests and strikes are among the few ways people feel they can rebalance an agenda that's been captured by special interests," he says.

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