Winter of Discontent? Why Europe’s Middle Class Is Revolting

What do pilots in Paris have in common with doctors in London? They’re part of a rising tide of middle-class activism that’s sweeping across Europe as austerity measures start to cut the continent’s better-off more deeply.

Support for left-wing causes in Europe has been steadily on the rise since the credit crisis seven years ago, particularly in countries like Greece and Spain which are chafing at the reins of bailouts accompanied by austerity measures. Yet the continent’s middle classes have arguably been less affected by cost-cutting than the lower-earners.

In France, an angry crowd ripped the shirts from two Air France executives, both of whom were part of a team outlining a drastic new job- and cost-cutting plan affecting pilots, earlier this week. Even in Germany, often praised as a model of co-operation between workers, employers and the state, employees from pilots to postal workers have been on strike at some point this year.

And in the U.K., junior doctors are planning a large demonstration at London’s city center next weekend, and considering strike action, after the government announced changes to their contracts. Delegates attending the ruling Conservative Party conference this week were shouted at and spat on by anti-austerity protestors.

This particular phase of protests may have greater effect than earlier disputes, especially as the people who are protesting are more likely to vote and have greater economic impact.

“You could argue that the first phase, if you like, of austerity hit people who are more marginal and hence protests were more muted or got less attention. This second phase of austerity might hit people who have a stronger voice,” Emran Mian, director of U.K. think tank the Social Market Foundation, told CNBC.

There is also significantly less panic about the potential fallout from the credit crisis now, when the continent has been economically stable for several years, than in 2010-13. In bailed-out Ireland, when consultant doctors had a blanket 30 percent pay cut in 2012, there was barely a whimper, whereas salary cutting proposals for junior doctors in the U.K. last month have been met with fury and a concerted social media campaign.

There are legitimate concerns that the post-credit crisis environment is allowing some governments or corporations to bring in cost cuts or other measures that could cause long-term damage. In the case of the U.K., the trade union movement is up in arms about government proposals to limit strike action, particularly in public services. Frances O’Grady, the general secretary of the Trade Union Congress, described the proposals as “disproportionate and unnecessary” to CNBC. She also pointed out that the number of days lost to strike action in the UK is in long-term decline — around one-tenth of the level they were in the 1980s, according to TUC data.

CNBC

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Craig Erlam
Based in London, England, Craig Erlam joined OANDA in 2015 as a Market Analyst. With more than five years' experience as a financial market analyst and trader, he focuses on both fundamental and technical analysis while conducting macroeconomic commentary. He has been published by The Financial Times, Reuters, the BBC and The Telegraph, and he also appears regularly as a guest commentator on Bloomberg TV, CNBC, FOX Business and BNN. Craig holds a full membership to the Society of Technical Analysts and he is recognized as a Certified Financial Technician by the International Federation of Technical Analysts.