The Hindu Business Line : Europe's nations on vacation

THE Alexandrian philosopher, Claudius Ptolemeus, divided the equinoctial hour into 60 minutes, inspired by the scale of measurement used in ancient Babylon. And, it took a militant labour movement to get the working day down to the fictional "eight-hour" length!

As it was in ancient time, so it is today. There is a basic conflict of interests between employers and employees over working time.

Capitalists know that more hours means more profit. But shorter hours for working people have been at the centre of any progressive social or political agenda and one of the key priorities of European trade unions.

Initially, this was chiefly aimed at contributing to the improvement of workers' health and living conditions. During the 1960s and the 1970s most of Western Europe experienced a steady cut in working hours, underpinned by high growth rates and considerable activity by the trade union movement in favour of improvements in living and working conditions.

This was primarily achieved through a shortening of working days, reductions in overtime, the abolition of Saturday working and a rise in the number of annual holidays.

In recent years, enormous pressure has been building on European employers — especially those seeking to ensure not only their competitiveness but, also their survival — to revert to longer work hours. Barring a few companies, most of corporate Europe and its powerful trade unions are still on "vacation" — refusing to understand the "ground realities", reluctant to accept wage cuts or work longer hours. Let's take a quick look...

The average Belgian works less but is paid more than citizens in neighbouring countries. A Belgian employee earns on average 8 per cent more than other Europeans. The Belgian government would rake in euro 8.3 billion if it set wages at the same level as border countries.

Denmark's traditional 37-hour workweek will soon become a thing of the past, when the next rounds of collective bargaining talks begin in 2007. If Danish jobs are to survive tough competition from low-wage countries, they must incorporate longer working hours — with or without pay.

British workers have the shortest holidays and the longest working hours in Europe 43.6 hours a week contrary to the EU's prescription of 40 hours. In addition, a British worker is entitled to only 20 statutory days holiday a year.

By comparison, Mediterranean countries such as Spain, Portugal, Greece and Italy have some of the longest holidays in Europe, ranging from 33 to 36 days. Austria has the longest with 38 days! France is another country with a long holiday list of 36 days a year. Luxembourg, a small country with a working population of only 2,31, 000, enjoys a long annual break of 35 days.

Recently, a Dutch court blocked a financially-struggling firm from making its staff work 40 hours a week for the same wages instead of the current 36 hours — despite the fact that they volunteered to do so. The court also ordered the company to pay a penalty of euro 100,000!

With Germany's main political parties trying to piece together an agenda for the nation's new government, the country's retailers have launched a fresh bid for liberalisation of the shopping laws, which stipulate that all shop close by 8 p.m. from Monday through Saturday and not trade on Sundays.

It is especially annoying to be driven out from the department stores the minute the clock strikes eight. Even in Catholic Poland, businesses chalk up successful trading and high sales on Sundays. People enjoy a family shopping day.

The German economy — currently on the brink of recession — is being damaged because workers are having too much time off. Unemployment, at 11 per cent, is at the highest level since German reunification, and Germany tops the European league table for public holidays.

Despite its reputation for hard work, Germans have an average of 43 days off a year. Thirteen of these are public holidays, with some regions having up to 17 holidays. The 35-hour German work-week is one of the shortest in the EU.

The average annual cost of employment in the EU is 34,143 euros. The highest costs are borne by employers in the north European states, with France, Belgium, Sweden and Germany appearing highest in the rankings. Greece, Portugal, Spain and Ireland have the lowest costs.

The introduction of the euro has added greater transparency of employment costs across the EU. This will encourage employers to look at pay and benefit strategies on a pan-European basis.

The ease of moving certain manufacturing and service industries from one State to another means employment costs are becoming more crucial, not only in business investment decisions but, in business closure decisions. Here is a recent stirring tale. In the middle of December, the management of the Swedish electrical company Electrolux announced the closure of a factory — the AEG works in Nuremberg — and shift of production mainly to neighbouring Poland. Workers responded to the announcement with strikes and protest actions. There are 1,750 jobs directly threatened by the closure of the factory, with many more jobs endangered in ancillary production processes. The closure of the Nuremberg works can be regarded as the end of an electrical company steeped in tradition, and which has played a large role in shaping Germany's industrial development over the last century.

Following his acquisition of the Edison patents, Mr Emil Rathenau created the German Edison Company in 1883, which he renamed the General Electricity Company (AEG) in 1897. At the beginning of the 20th century, AEG developed into one of the largest companies in the world, providing employment to over 200,000 workers.

In 1994, the Swedish Electrolux concern took over AEG, which had its headquarters in Nuremberg.Today, the company plans to close 13 of its 20 plants in Western Europe and switch production to Poland.

The situation at AEG is similar to that confronting a number of other companies in the Nuremberg region, which now has one of the highest rates of unemployment in Bavaria. In 1990, 89,000 persons were employed in the State's industries, today this figure stands at 52,000. Well known firms such as Grundig, Phillips and Triumph-Adler, which each employed several thousand workers, have all disappeared!

Further, German Telekom plans 32,000 dismissals and the auto manufacturers Volkswagen and DaimlerChrysler 8,000 each. An equal number of jobs are due to go at Siemens. The Karstadt-Quelle company has announced 5,700 job losses, and the HypoVereinsbank 2,400. Every week witnesses new announcements of mass redundancies.

Meanwhile, IG Metall, the powerful union for the engineering and metalworking sectors, officially announced its demand for the upcoming wage round, which began on February 8, calling for pay increases of 5 per cent for the 3.4 million workers in industries ranging from cars to semi-conductors.

Learning to understand the implications of change is one of the most important tasks of our age. Today, Germany is concerned by the risks of change. Hard-won stability and social equality seem too valuable to gamble away. It is understandable that many in Germany are wary of this new and even more dramatic wave of change now breaking all over.

However, to paraphrases Darwin: "Not the strongest will survive, but the one who can adapt the best to change."

(The author is a former Europe Director, CII, and lives in Cologne, Germany. Feedback may be sent to mohan.murti@t-online.de)

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