Austria’s big strike: Meet Wolfgang Thatcher

Date: 10/05/03

Austria's old system of consensus and compromise may be under threat

THE annual average number of days lost per Austrian worker as a result of strikes used to be measured, not actually in days, but in seconds. That was thanks to the country's vaunted “social partnership”, a corporatist arrangement set up after the second world war whereby trade union officials, business leaders and government ministers cut back-room deals on wages, work conditions and most social and economic legislation. For half a century, it worked. This week, on May 6th, the country was brought to a halt by a rare country-wide strike. Is the old system falling apart?

The strike, organised by the main trade-union group, the GB, stymied public transport and closed schools and dozens of the country's biggest companies, in protest against the government's plans to overhaul Austria's pension system. The unions say they will continue various strikes until the coalition of Chancellor Wolfgang Schussel's People's Party and the far-right Freedom Party withdraws its controversial proposals.

Mr Schussel is unlikely to budge - and the union leaders probably know it. Most Austrians feel edgy about the government's pension proposals, which would reduce pensions under the current pay-as-you-go system for future retirees by a good 10% (and by 30% in some cases). Most of them support the strikes. But they would probably change their minds if the unions' activities were to start disrupting ordinary people's lives on a wider scale and if the economy began to suffer badly as a result. Austrians certainly don't tolerate strikes in the way many Italians and French people do. So Mr Schussel will sit tight. Unless the Freedom Party's former leader, Jörg Haider, a maverick populist, launches another revolt within his party, parliament will probably pass the pension bill next month.

The union leaders see strikes as the only way to reassure their angry members that the unions still care - and matter. But they could risk playing into Mr Schussel's hands. For he is determined to end Austria's system of consensus politics, which he thinks is preventing the country from meeting the challenges of globalisation and from succeeding in an ever-more-competitive world market.

His first blow against the old culture of compromise came three-and-a-half years ago when he took his party out of the “grand coalition” led by the Social Democrats and struck a controversial bargain with Mr Haider's Freedomites. A new coalition of the unadulterated right pushed Austria's traditional social partners - the trade-union association, the left-wing chamber of labour and the conservative business chamber - to the sidelines, while letting them draft some bills, including one that obliged companies to set up private pension schemes.

But in this latest spat, over state pensions, Mr Schussel has decided to snub not only the trade unions but also the business chamber and its president, who leads a powerful faction in Mr Schussel's own party. The chancellor, it seems, looks to Margaret Thatcher for his inspiration. If he can cut the unions down to size, he intends to liberalise further, among other things by loosening Austria's restrictive shopping hours and by weakening labour-market protection.

If that means a prolonged punch-up with the still powerful unions, some businessmen fear that investors may be scared off. Until now, social partnership and the pragmatism of unions and bosses have helped make Austria rich. Much depends on whether Mr Schussel's more abrasive approach continues to be backed in his own party, most of whose members probably still prefer the old system of Gemutlichkeit (cosy joviality) to the bone-cracking of a Thatcherite revolution.

Austria's old system of consensus and compromise may be under threat.