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Originally published Thursday, March 14, 2013 at 4:55 AM

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Workers protest to get EU leaders to end austerity

Some 10,000 workers from across the European Union protested outside a summit of EU leaders Thursday, demanding they end years of austerity and focus instead on curbing runaway unemployment with more spending.

Associated Press

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BRUSSELS —

Some 10,000 workers from across the European Union protested outside a summit of EU leaders Thursday, demanding they end years of austerity and focus instead on curbing runaway unemployment with more spending.

The protest in frost and snow just outside EU headquarters vented frustration over spending cuts and tax hikes imposed by the bloc's governments to deal with the debt crisis. Trade unions and an increasing number of economists say austerity has inflicted severe economic pain - the economy of 17 EU countries that use the euro are stuck in recession and joblessness is at a record high.

Inside the summit, leaders made it clear that they realized that public anger was reaching dangerous levels, but they offered little in the way of new solutions, saying instead they were going to stay the course with enforced budget cuts.

"Tonight, in view of our bleak economic prospects, in view of growing social distress, we looked very carefully at the situation," said Herman Van Rompuy, president of the European Council, after the meeting ended. The Council is the gathering of national leaders of the 27 EU countries.

But he added, "The only way out of the crisis is to keep tackling its root causes. ... We reconfirmed our overall economic strategy."

Much of that strategy includes measures to cut spending and raise tax revenues - measures that take money out of the economy, something that many economists say contributes to unemployment.

The leaders also recommitted themselves to increasing the competitiveness of EU economies through measures such as cutting red tape for businesses and decreasing labor costs.

Support was also given to previously announced measures to increase employment, such as a (EURO)6 billion ($7.75 billion) to fight youth unemployment. But that money will be spread over seven years - and not a penny of it will be disbursed before Jan. 1, 2014.

"Growth and jobs are not things government can buy or summon," Van Rompuy said.

He said that the EU's economic policies of the past few years are paying off. But for many, that progress is painfully hard to see.

Unemployment across the 17 EU countries that use the euro rose to a record 11.9 percent during January, from 10.8 in the previous year. Youth unemployment is also continuing to rise unabated, peaking at 24.2 percent.

Yet the scope for action is limited. Most leaders remain committed to reducing public debt quickly, primarily through spending cuts and raising taxes.

This has led to increasing calls for an end to austerity, replacing it with a push for growth.

"Deepening the recession by dogmatically implementing austerity policies makes no economic sense whatsoever," said European Parliament President Martin Schulz.

German Chancellor Angela Merkel said it was not unusual that the benefits of the EU's policies were not yet being felt.

"There often is a much longer lapse of time between the implementation and the reforms, for example for growth and employment to increase," she said.

She said that framing the debate as one between growth on the one hand and austerity on the other was a false division.

"Budget consolidation, structural reforms and growth are not contradictions but require each other," she said. "It is necessary to trim the deficits to promote growth and investment."

The two-day EU spring summit, which will stretch into Friday, traditionally centers on the economy, and peaking unemployment has given it special urgency.

"No leader can be happy with the situation where 26 million people are out of work in the European Union. That is why we are here," said Ireland's Prime Minister Enda Kenny.

However, the leaders have not yet offered an alternative to the fundamentals of the austerity policies - even though some appear ready to temper some of the measures.

Protesters at Thursday's labor demonstration are calling for fundamental changes to the current measures, however.

Europe's manufacturing industry has been hit by a succession of plant closures and job losses. At Thursday's demonstration, workers from the steel giant ArcelorMittal and construction equipment maker Caterpillar protested recent moves by their companies to cut the size of their workforces.

"The policies that have been put in place have failed, we are in a double-dip recession. We see that the efforts have been put on the shoulders of workers," said Bernadette Segol, the general secretary of the European Trade Union Confederation.

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AP writers Robert Wielaard and Juergen Baetz contributed to the story. Don Melvin can be reached at http://twitter.com/Don-Melvin

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