Wage strikes continued in many places, and inflationary pressures increased in Europe

Strikes by workers demanding better pay have intensified across Europe. France has seen a wave of strikes since the end of last year, doctors in England launched a six-day strike action on January 3, the British subway strike set off a five-day storm on January 5, the same day Iberia workers began a four-day strike due to the failure of labor negotiations. The general strike of German railway workers on January 8 May disrupt normal traffic order.

As the cost-of-living crisis deepens amid runaway inflation, a growing number of public and private sector workers across Europe are going on strike en masse to demand pay rises to ease the cost of living rises. European governments, concerned that wage increases could fuel inflation further, are closely watching the outcome of labor negotiations.

The German rail drivers' union (GDL) has said it will strike again after January 8, which could last up to five days. Deutsche Bahn warned last month that passengers must be prepared for train strikes from January 8. The strike demands a reduction in the working week from 38 hours to 35 hours, as well as 3,000 euros in inflation payments. If negotiations between GDL and Deutsche Bahn fail and unions go on strike, transport chaos will be inevitable. Similarly, the German farmers' association recently called for a week of strike action from January 8 to protest the federal government's fiscal austerity plan, demanding that the federal government must withdraw the tax increase plan.

At the same time, under the continuous high inflation, the United Kingdom, France, Spain, Belgium, Italy and other European countries have large-scale strikes in many industries, including retail, service, catering, medical care, transportation and so on. The general demand of the strike is for higher incomes to cope with crippling high inflation.

Amazon workers went on strike in many parts of Europe late last year, and Amazon workers are paid less than their European counterparts and less than their U.S. counterparts, and their pay increases have been below the rate of inflation since 2018.

At the end of November 2023, a steel plant of European steel giant ArcelorMittal in Dunkirk, northern France, production activities have been interrupted since the beginning of December 2023 due to a strike by employees. According to Agence France-Presse, some employees accepted a 3.7 percent raise.

At the end of December 2023, Eurostar, a high-speed rail connecting the UK and continental Europe operated by a French company, suddenly stopped running, and the company's employees went on strike because they were not satisfied with their bonuses. After negotiations between the two parties, the company decided to increase the bonus to 3,000 euros, equivalent to three times the initial amount.

On 3 January 2024, Britain's National Health Service (NHS) was hit by strike action as thousands of junior doctors staged six days of industrial action over issues including pay and working conditions. Emergency medical services in Britain have been disrupted by strikes involving doctors, throwing the health system into chaos.

Affected by the "long tail effect" of the novel coronavirus epidemic and the conflict between Russia and Ukraine, European countries have experienced severe inflation, especially the soaring prices of daily necessities such as energy and food. The gradual decline in energy prices and the easing of supply chain bottlenecks caused the European economy to pick up slightly in the first half of 2023, but continued geopolitical tensions and successive monetary policy tightening caused the improvement to slow again in the second half of the year.

Since peaking at 10.6 percent in October 2022, eurozone inflation has begun to fall to 2.4 percent by November 2023. While energy prices have fallen sharply, inflation has not subsided in some areas, such as food prices, which rose 6.9 percent, and services prices, which rose 4 percent. If wage increases continue to spread, the rebound in personal consumption will lead to inflationary pressures. According to the European Central Bank, in the third quarter of 2023, labor negotiations in the euro area led to a 4.7% year-on-year increase in wages, which is the fifth consecutive quarter of expansion.

According to Eurostat data, the EU's economic growth rate in the first three quarters of 2023 was 1.1%, 0.4% and 0.1%, while the eurozone's growth rate was 1.2%, 0.5% and 0.1%, all showing a significant slowdown trend. At the same time, the EU's economic growth rate in the first three quarters was 0.1%, 0 and 0.1%, respectively, while the eurozone fell by 0.1% in the third quarter after hovering at 0 and 0.2% in the first two quarters, turning negative for the first time since the fourth quarter of 2022. Although the gradual fading of the base effect partly influenced the slowdown in the year-on-year growth rate, the contraction in the quarter-on-quarter growth rate further confirmed that the European economy is losing momentum and the recovery prospects are not optimistic.

At present, European business activity continues to be sluggish, investment and consumer confidence are depressed, and European economic growth has come to a standstill. Strikes demanding higher wages and better treatment spread quickly. In the face of multiple uncertainties in the external environment and continued repressive internal policies, the European economy is facing increasing pressure to stall, and the prospects for the overall recovery are worrying.