General strike in Belgium today as unions fight government’s austerity plans
While unions call for greater investment, the new government plans on slashing public spending.
Belgium’s unions have organized a general strike against the government coalition’s plans to slash public spending and implement austerity. At a moment when economists, trade unions, and others are calling for ambitious investments, Belgium’s new coalition government is planning on gutting public spending.
The “Arizona” coalition government - a reference to the colours of the US state Arizona’s flag - includes the right-wing Flemish nationalists, liberals, and the Flemish socialist party. According to the country’s unions, the coalition is planning a total of €14 billion in cuts to public services plus an additional €3 billion to pensions.
The general strike has received broad participation across Belgian society, extending throughout sectors such as public transportation and rubbish collection. While regional airports are still seeing flights, the country’s largest airports have been effectively shut down for the day.
Last month, a previous general strike brought nearly 100,000 to the streets of Brussels mobilising against the proposed cuts.
Austerity while companies receive among the EU’s most generous subsidies
According to the European Transport Federation, the proposed cuts include €675 million to the national rail operator as well as plans to “introduce market competition” (read: privatise) to regional train networks.
The General secretary of the Belgian trade union confederation ACV-CSC wrote that €2.7 billion in cuts on the health budget and unemployment support are on the table. This is in addition to another €500 million in planned cuts to the Belgian healthcare system.
The coalition government has defended the decisions by claiming that they are working to secure the future of Belgium’s youth and that there is no money to be found. Little mention has been made of the fact that Belgium’s companies have received some of the most generous subsidies across the entire EU (€16 billion in 2021).
Moreover, the think tank Minerva points out that Belgians with average salaries have a tax rate of around 43% of their income whereas for the country’s wealthiest, it was just over half of that (23%).
EU’s debt rules and lessons not learned
Belgium is one of several EU countries facing disciplinary actions from the EU for having a budget deficit of 4.4%, exceeding the EU’s threshold of 3%. Nevertheless, Belgium’s public debt to GDP ratio has been stable for the past decade, albeit at a somewhat higher level than the EU average.
Analysts have argued that the EU’s fiscal rules are not fit for purpose - especially in light of the bloc’s need to invest in energy, security, and a just transition. In contrast to the Belgian government’s moves to austerity, Germany’s recent reform of its own constitutional debt rules may indicate at least a partial movement away from the bloc’s tendency towards fiscal constraint.
We can look to recent history to understand the implications of prolonged austerity policies.
After the financial crisis of 2009, austerity was forced by the Troika on several EU countries. Research has since shown that the austerity policies deepend the financial crisis and continues to have long-lasting impacts on the citizens of these countries.
A report in 2022 by the New Economic Foundation found that on average, EU citizens earn around €3,000 less annually as a result of the austerity policies than if they had not been implemented. The policies imposed on Greece were perhaps the most severe with the country’s unemployment skyrocketing, suicide rates rising, and the health system eroding.
While much media attention has focused on today’s disruptions resulting from the general strike, very little has covered the status of Belgium’s public services or the consequences that the cuts might result in.
Take the country’s healthcare system: Belgium currently spends around 11% of its GDP on health - average for the EU and significantly less than the United States, which spends around 17.5% of its GDP on healthcare.
The outcomes of the Belgian healthcare system are impressive - coverage is universal, quality of care is high, and health outcomes far exceed those of the United States. The Belgian healthcare system runs on the principles of universal access and solidarity in cost-sharing. The cuts proposed according to the new government’s agenda could mean a significant degradation of this system and ensure that the country’s youth will not have access to the same level of care as the previous generation.
“Securing the future of Belgium’s youth” indeed.