Europe is burning

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    Sep 27, 2010
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    Europe is burning

    LONDON | Wed Dec 15, 2010 9:59am EST

    LONDON (Reuters) - As austerity bites, Western Europe faces a near inevitable rise in protest and unrest in 2011 which is likely to hit markets and dampen weak governments' appetite for reform but not affect policies dramatically.

    So far, social unrest over the financial crisis has varied from country to country. In some of the worst affected nations such as Ireland and Latvia, acceptance and even apathy has prevailed, while Greece has seen fatalities and street clashes.

    Increasingly, there are signs of rising social pressures. Many Western European countries are only just embarking on multi-year deficit-reduction packages, a hard sell in states where expectations have risen for generations.

    Greek protesters clashed with police in central Athens on Wednesday as tens of thousands marched against austerity measures aimed at pulling the country out of a debt crisis. On Tuesday, Italian rioters and police fought battles in Rome after Prime Minister Silvio Berlusconi won a no-confidence vote.

    Britain saw its worst clashes in two decades last week as students demonstrated over tuition fee rises, with Prince Charles and wife Camilla caught up in the melee. More unrest is expected next year as unions protest against much broader cuts.

    "It's almost inevitable that there will be more protest in 2011 than 2010, particularly in countries such as Greece and the UK where there are real public divisions over how much austerity is necessary," said Carina O'Reilly, European security analyst at IHS Jane's. "It's going to get nastier. We could well see deaths or serious injuries. We could well have seen deaths in the London riots last week. We were just lucky."

    None of the European protests have so far had a major policy impact. But in some countries at least, particularly those with upcoming elections, worries over further unrest will deter the government from more aggressive reforms.

    French President Nicolas Sarkozy forced through pensions reform despite widespread protests earlier this year. But he faces elections in 2012 while Berlusconi is expected to test the electorate next year despite having won this week's vote.


    "The propensity for civil unrest in France and Italy will act as a check on their governments," said Nomura political analyst Alastair Newton. "Sarkozy may have seen off the unions ... but they are angry and will want to reassert themselves possibly around the public sector pay round in the spring."

    Spain has elections in 2012 and Portugal's minority government is also seen lacking the political clout to manage serious street protests -- again slowing reform at least as long as markets remain more forgiving than for Ireland or Greece.

    But at the same time, Portuguese and Spanish unions and many potential protesters are also seen as reluctant to take steps which could spark the downfall of left-of-center governments and usher in the right.

    The two Western European countries facing the deepest cuts -- Greece and Ireland -- have seen very different trends in terms of protest and unrest. Both are being watched closely by wider markets, and any suggestion reforms might be threatened could spook investors worldwide.

    Violent demonstrations in Athens in May which saw three people die in a burning bank hit global markets, but also sparked national soul-searching and a falloff in protests.



    Riots break out in Athens during general strike, as tens of thousands protest austerity

    15 December 2010

    Link includes raw footage video http://www.latimes.c​om/business/...g​reece-financial-cris​is,0,1595125.story


    Riots In Rome after Silvio Berlusconi emerges vict...

    15 December 2010

    Link includes raw footage video​video-detail...v​ictorious/3750477948​/?icid=VIDURVNWS04

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