Amid European Tensions, French Workers Strike

The global financial crisis is moving from Europe's boardrooms and stock exchanges to the main streets of Reykjavik and Paris, as violent protests and labor unrest offer a stark warning to leaders gathered at the annual World Economic Summit in Switzerland.

Hundreds of thousands of French workers, angered by Prime Minister Nicholas Sarkozy's handling of the country's economic downturn, failed to show up at their jobs on Thursday. The strike disrupted nearly every aspect of everyday life, from train and air service to schools, banks and the mail.

Events in France only added urgency to the summit in Davos, Switzerland, where leaders met to discuss ways out of the crisis.

In the French capital, Metro service was shut down, forcing many workers to walk or bicycle to work in freezing temperatures. A recent law mandating minimal subway service kept some trains running, and they carried capacity loads of commuters.

Some workers at factories hit by layoffs also joined the strike. Hospital staff also stayed off the job.

The strike involved eight major unions. More have threatened work stoppages in coming weeks if the Sarkozy government fails to take more action to protect jobs and wages.

So far, Sarkozy has said nothing about the strike, which has been dubbed "Black Thursday" by the French press. His government recently announced a $33 billion stimulus plan, but the unions say it's not enough.

Sarkozy's government is concerned that a growing strike could be transformed into a wider social protest movement, such as one that inflamed French suburbs in 2007. Signs of civil unrest have been evident in recent weeks in Latvia, Lithuania, Greece and Iceland.

In the Icelandic capital, Reykjavik, street protests have forced out Prime Minister Geir Haarde, who tendered his resignation Monday amid the country's growing financial and credit crisis. Haarde will step down Saturday.

But even that did not satisfy protesters, who on Wednesday picketed outside a NATO meeting in Reykjavik where Haarde was speaking. Police used pepper spray and arrested six protesters.

The global financial crisis hit Iceland in October, ending a decade of rising prosperity and triggering a collapse in the currency and financial system. Earlier, the country's central bank said the jobless rate in the nation of 320,000 was likely to rise to 11 percent in the first quarter of 2010.

At the Davos summit, meanwhile, former President Bill Clinton said if President Obama gets support from Congress, his economic stimulus package could show results in a year to 15 months.

Clinton said asset deflation must be stopped.

"Right now the house is on fire and we need to put it out as quickly as we can," he said. "The quickest way to do it is to stop the deflation in asset prices and do it in a way that allows the financial system — that did bring us a lot of growth the last 20 years — to kick back in."