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European leaders are gathering for a summit in Brussels this week in last-ditch efforts to solve the Eurozone crisis. French President Nicolas Sarkozy commented that failure was a “luxury we cannot afford.” On Friday, member nations of the Eurozone are expected to vote on a plan drafted by Sarkozy and German Chancellor Angela Merkel. They propose amending treaties that govern EU finances, demanding more rigorous budget management from members. European Commission president Herman Van Rompuy (Rom-pay) has offered an alternative approach that includes the punitive measure of barring a member nation from voting if it receives a bail-out and then fails to keep its deficit under 3% of national GDP. EU officials are also looking into an early launch of a new 500 billion euro bail-out fund, the European Stability Mechanism (ESM), initially slated to replace the old structure, the European Financial Stability Facility (EFSF) in 2012. The two funds will likely now be used together. The International Monetary Fund (IMF) may also lend money to cash strapped EU nations. Disagreement over the details of any one plan is not the only obstacle to an EU consensus in negotiations. British Prime Minister David Cameron said he will not sign anything until safeguards are in place to ensure the EU does not gain any more power over Britain’s financial system. Meanwhile, the credit ratings agency Standard and Poors has placed 15 AAA rated EU countries, including France and Germany, on review, threatening a downgrade. Observers say such a move would create panic among investors, plunging the already gloomy situation in Europe into further chaos. And this week the European Central Bank announced it will cut interest rates for a second month in a row to try to stave off a credit crunch.

Meanwhile the European Metalworkers Federation announced that thousands of workers were on strike today across the European plants of the world’s largest steel manufacturer, ArcelorMittal. More than 25,000 workers are launching twenty four hour work stoppages in protest of job insecurity, leading to production shortfalls of 10-20%. The strike comes just days after Britain saw its biggest strike in decades against cuts to pensions. An estimated 2 million people walked off their jobs for a massive strike last Wednesday, striking against austerity measures proposed by the Government. Teachers, civil servants, nurses and construction workers were among those who gathered in cities around the nation to fight proposed measures that would raise the retirement age and require larger contributions to pensions. British parliamentary support for austerity measures mirrors a growing consensus among EU heads of state that the Eurozone crisis demands spending cuts. Tomorrow, the staff of Unilever in London, will for the first time in their history, go on strike to protest plans to scrap their pension plans. And, the Civil Aviation Pilots’ Union has announced a walkout of staff with TAP Air Portugal for 8 days during the holiday travel period protesting their company’s planned privatization.

GUEST: Will Straw, Associate Director at the Institute for Public Policy Research

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