2010 December 04 Saturday
Spanish Air Traffic Controllers In Fat City

Why Spanish airports are closed. The air traffic controllers feel sick about losing a couple hundred thousand dollars per year in overtime.

Spain's air traffic controllers have been involved for over a year in bitter negotiations with state-owned Aena over wages, working conditions and privileges.

The dispute intensified in February when the government restricted overtime and thus cut average pay of controllers from US$463,610 a year to around US$264,920.

It is absurd to have Spain or Greece or Portugal sharing a currency with Germany. It is not going to become any less absurd next year or the year after. This has got to sink in eventually.

Business people in the southern countries call it the euro bind. Oscar Turner, who runs a film company in Portugal, explained, “The euro’s great if you’re traveling around, but it’s an absurd idea to have the same currency in a country like Greece or Portugal as in Germany, which has totally different habits and culture.”

The highly indebted countries of the euro zone “can’t grow their way out of debt,” Mr. Turner said, nor can they devalue to make their exports more competitive. “No one in these countries can make the same product for a price that competes” with Hungary, let alone Turkey or China.

Different habits and culture? That's part of it. But let us boil it down to brass tacks: Labor laws make lay-offs extremely difficult and powerful unions (backed by laws even stronger than the Wagner Act which drove so many US airlines and car companies bankrupt) push labor rates up to uncompetitive levels. These countries need the ability to inflate their currencies to lower inflation-adjusted wages.

Jean-Claude Trichet, president of the European Central Bank, so totally misses the clue train.

Mr. Trichet studiously avoided singling out specific countries to blame for the sovereign debt crisis, which emerged because of creeping indebtedness. Instead, he said, a “quantum leap” was needed in the zone’s fiscal and economic governance.

Specifically, he called for a “quasi-federation — not a political federation” to better coordinate “the budgetary surveillance processes and rules that we have.”

Economic governance? What, with a central labor law? Are the Germans really so many in number that they have so many votes in the Euro Parliament to get legislation thru a more powerful European Parliament that would break the unions and undo the labor laws of southern Europe? (Um, no) There's an air of unreality to his thinking. Federation does not solve the problem because it gives the profligate control over the abstemious. Germany mixed in with Spain and Italy is Germany with more of Spain and Italy's laws and their ability to divert more money from Germany.

The only way central rule of Europe could work: Make the non-German states colonies ruled by the Germans. Then the Germans could impose labor law changes that would provide Spain, Greece, Portugal, and Italy with the lower wages, greater workplace discipline, and greater ease in worker firing that they need. You might laugh. But at an economic level Europe would perform better. The Euro elites need to understand that they can not impose German ways over the rest of Europe.

Really, the Euro is broken. The people in Spain and Italy do not want to wake up tomorrow and put away their class warfare attitudes toward the more productive. They want political power over the more productive and want to force up their wages to uncompetitive levels.

Oh, and the British should thank George Soros for helping to keep them out of the Euro.

Share |      By Randall Parker at 2010 December 04 09:49 AM  Europe Monetary Union


Comments
Jeff Maylor said at December 4, 2010 5:49 PM:

"The dispute intensified in February when the government restricted overtime and thus cut average pay of controllers from US$463,610 a year to around US$264,920."

I cannot believe it. I read the article and saw that some air traffic controllers in Spain make almost $660,000 a year. OMG. I am forwarding this to everyone I know. So is this the system that our Fed helped bail out with $3.3 trillion?

WJ said at December 5, 2010 10:43 AM:

Government is the world's original protection racket. The trouble now is that instead of supporting a king and a few noblemen we have millions of permanent bureaucrats, and idiots who have been convinced, usually by government-run schools, that this is all a good thing.

I knew a guy who was one of the air traffic controllers fired by Reagan. He was an a-hole, and a layabout to boot. Not surprisingly he still hated Reagan over a decade later.

JD Will said at December 5, 2010 10:45 AM:

"Oh, and the British should thank George Soros for helping to keep them out of the Euro"

How was this? Did the devaluation in 1992 contribute? I thought it was the Labour government that made this decision.

Thanks.

Randall Parker said at December 5, 2010 10:48 PM:

JD Will,

The ejection of the UK from the mechanism for keeping the Pound linked to the future Euro (by Soros and other speculators) helped kick the support out from under the move to put Britain into the Euro.

Engineer-Poet said at December 6, 2010 9:44 PM:

OT: the color-highlighted mouseover links inserted by Adbrite (or whatever it is) are really obnoxious.


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