To no surprise, trade unions across Europe are complaining heartily about their decreasing spending power. Funny how the central bankers are able to play hardball with the unions but are more than willing to bail-out their wealthy banker friends. Expect union confrontations to rise in the future.

Regards - VHF

European Unions Protest On Pay As Inflation Bites

04.05.08, 7:28 AM ET

By Brian Love and Manca Ulcar

LJUBLJANA, April 5 (Reuters) - Trade unions protested over corporate greed and the "poverty wages" of more than 30 million workers in Europe as politicians and central bankers meeting in Slovenia on Saturday urged wage restraint to combat inflation.

At a time when food and energy prices are surging worldwide, the European Trade Union Confederation sought to mobilise up to 35,000 people for a rally in Slovenia's capital on Saturday to denounce a decline in spending power and demand better pay.

Company profits have risen for more than a decade, but the share of wealth going into wages has shrunk and the divide has widened between those at the top and bottom, ETUC, an umbrella body for unions across the continent, said.

"This is a campaign launched in some anger and with real commitment," ETUC leader John Monks said ahead of the rally.

Finance ministers and central bank chiefs of the 27 European Union countries met to discuss a deteriorating economic outlook at what were once the bear-hunting quarters of late communist dictator Josip Broz Tito, in Brdo, 25 km outside Ljubljana.

They sounded the alarm over inflation -- which hit a record annual rate of 3.4 percent in the EU in March -- pushed higher in large part by the prise of oil and surging costs of food.

European Central Bank Governor Jean-Claude Trichet said that keeping a lid on labour costs would be "absolutely decisive" in fighting inflation and that a five percent pay rise for German public sector employees in 2008 should not be copied elsewhere.

"It would be an enormous mistake to imitate Germany," said Trichet, stressing that German public sector workers had gone without any pay rise in the past two years and that others had not shown such restraint.

More unusually, the euro zone's chief inflation-fighter got hearty support from politicians too who were at pains to say that the fight against inflation was the best way to defend people's spending power.

Jean-Claude Juncker, who chaired one of several sessions of discussion here, told a Friday news conference he and Trichet could afford to pay more for tomatoes but that many could not and inflation had to be stamped out.

"Those living on 300, 400, 500, 600, 700 euros can't live with runaway inflation," Juncker said.

Spanish central bank chief Miguel Angel Fernandez Ordonez said on Saturday slowing economic growth at the moment would eventually reduce the rate of inflation but that any other moves which could worsen inflation should be avoided. (Writing by Brian Love; additional reporting by Krista Hughes, Editing by Nick Edwards)