Europe: the downturn beyond the headlines

REVIN, France — From the cafe Au Bon Accueil, to the hairdressers on Rue Pasteur and the bakery next to the mayor’s office, the center of Revin is full of empty store fronts.

While attention has focused on the woes of Irish bankers or traders in Greek bonds, the failed businesses in this gritty French town bear witness to the continuing impact of the global economic downturn on ordinary Europeans.

“We thought it was beginning to get better, but if things don’t pick up in the next few months, we’ll be heading straight to disaster,” said Revin Mayor Philippe Vuilque.

France has been spared the market turmoil that has undermined the economies of Greece and Ireland and now could spread to Portugal and Spain.

But despite reassuring words from the government in Paris, there is widespread fear on the ground in France and elsewhere in Europe that the eurozone’s widening crisis of confidence could start to impact the real economy in nations that have so far escaped the direct effects of the financial unrest.

“Many companies have lost a significant part of their orders,” said Vuilque, who is also a member of the National Assembly in Paris, representing the opposition Socialist Party. “There was a slight pick up after the summer, but now with financial crisis in Europe, everybody is worried, if growth doesn’t rebound soon the results could be catastrophic.”

Unemployment is already running at over 14 percent in this town in north-central France. That compares to a French national average of 9.3 percent.

For most of the 20th century, Revin was a thriving industrial town. Its iron foundries and metal works attracted waves of immigrants from Italy, north Africa and Portugal. In the 25 years following World War II, the population doubled to 12,000. The decline began not with the current economic crisis, but after the oil crisis of the early 1970s. The town now has fewer than 8,000 residents.

In the Orzy neighborhood across the river from Revin’s industrial heart, over a third of the apartments in the blocks of cheap social housing thrown up to house immigrants in the 1960s are derelict. Plans to re-house the families who still live there have long been delayed by lack of funding.

Revin’s main source of jobs today is a sprawling factory on the banks of the River Meuse that produces washing machines for the giant Swedish appliance maker Electrolux.

Social housing in the Orzy neighborhood of Revin, France. (Paul Ames/GlobalPost)

It employs 520 people and is an economic lifeline for the town. But with the company facing falling orders, talk in Revin is dominated by concern that the company will be tempted to switch production to a new plant in Poland, where labor costs are cheaper.

“There is a great malaise, people are sure they will move to Poland,” said former Electrolux worker Jean-Marie Vandenabeele, meeting up with colleagues at the local office of the CGT, France’s largest trade union.

Sales at the plant are down 18 percent this year, with serious falls in the French, Italian and in particular Spanish markets. Without a 7 percent increase in exports to Germany the situation would be worse.

However, although the German economy has bounced back faster than others in Europe, it has not played its traditional role as a motor for eurozone recovery because cautious consumers, fearful of further downturns, prefer to save rather than spend.

Shuttered storefronts on the main street of Revin, France. (Paul Ames/GlobalPost)

Other companies around Revin are faring even worse. Workers at the Ideal Standard ceramic company will be forced into part-time work schedules through December. Oxame, which made high-quality enamel bath tubs in Revin, has been taken over and the new owners have already announced layoffs. Production is likely to be switched to China, with only finishing work done in Revin.

In November, Delphi France announced it would be closing its vehicle air-conditioning plant in nearby Donchery by 2012 with the loss of 294 jobs.

Revin’s young people are among the hardest hit.

“We’ve pretty much been in a permanent crisis here since the 1980s, but 2008 was a shock and last year was a catastrophe for youth here,” said Elio de Almeida, director of a state-funded agency that seeks to place young people in jobs or training schemes.

Last year, de Almeida said the agency managed to find jobs for 270 of the 1,200 youngsters who turned to it. Of that, 80 percent were temporary posts. Before the crisis, he said, about half would find jobs.

This year, the placement rate is slightly better, but it’s due to increased government financial incentives to companies that take on young workers rather than any improvement in the economy. Young people who can are leaving to seek opportunities in Paris or other big cities.

“Students at school here are asking themselves what future do they have [here],” said de Almeida, the son of Portuguese immigrants who arrived in the 1960s. “We’ve got good people here who want to work but we need jobs. We try to do our best to give them hope and get them to stay, but it’s just not getting any better.”

A view of downtown Revin, France. (Paul Ames/GlobalPost)