Strike grips Belgium as EU leaders meet

India`s Jet Airways, which uses Brussels as its European hub, rerouted flights via Amsterdam.

Brussels: Belgium`s first general strike in almost two decades brought the country to a partial halt on Monday in an anti-austerity protest aimed at the government and EU leaders meeting in Brussels.

The entire rail network closed, buses and trams were idled, many schools and shops shut and production at the Audi and Volvo car plants stopped.

Charleroi Airport, a hub for Ryanair and other low-cost carriers, was forced to cancel all flights due to union plans to block the access road.

India`s Jet Airways, which uses Brussels as its European hub, rerouted flights via Amsterdam. United Continental cancelled its services to and from the United States.

“Some airlines cancelled services ahead of time ... but overall I think only about 10 percent of flights will be hit," an airport spokesman said.

High-speed international trains, such as the Eurostar from London and Thalys from Paris, were not running into or out of the country as of late on Sunday.

"We are a bit put out, but we recognise the right of people to strike," said Luiz Lopez, a university professor from Brazil seeking to travel to London.

At the port of Antwerp, Europe`s second busiest, all container and some bulk cargo terminals were shut, with shipping traffic suffering delays due to suspended harbour services.

The walkout coincides with the 17th EU summit in two years as the bloc battles to resolve its sovereign debt problems. The EU leaders will sign off on a permanent rescue fund for the eurozone and are expected to agree on a balanced budget rule in national legislation.

Unions have called the general strike, Belgium`s first since 1993, over government plans to raise the effective retirement age along with other measures designed to save EUR 11.3 billion (USD 14.8 billion).

"We are angry because they want to attack our pensions," said Philippe Dubois, a railway union member outside Brussels` Midi station. "We want to make some noise."

Belgium has pledged to bring its public sector deficit below the EU limit of 3 percent of gross domestic product this year to avoid an EU fine and to reassure investors it has its finances under control.

Battle ahead

The government knows growth this year will be below the 0.8 percent assumed for the budget drawn in December. A likely stagnation or contraction will force it to seek further savings when it revises the budget next month.

Economists estimate it will need to find an extra EUR 1.5 billion-2 billion.

The battle lines are being drawn for that debate, with the French-speaking Socialist Party of Prime Minister Elio Di Rupo insisting the rich should bear a greater burden with higher rates of tax on capital.

Pro-business Liberals and centre-right Christian Democrats, also in Di Rupo`s six-party coalition, say higher taxes would push the country into recession and government spending should be cut more.

Union leaders say they fear the government might be tempted to suspend its system of wage indexation, the linking of pay to inflation criticised by the European Commission and international economic organisations as driving up prices and undermining Belgium`s competitive position.

Economists say a single skipping of an automatic pay hike could save the government at least EUR 1 billion.

For now, many Belgians appear to have accepted the need for austerity measures. According to an opinion poll in top-selling newspaper Het Laatste Nieuws last week, only 21 percent of Belgians supported the strike.

Bureau Report

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