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Summer of discontent as strike action hits Europe

Tolga Akmen | Anadolu Agency | Getty Images

For heavily pregnant Camilla Francis, another strike on London's underground transport network will mean one more tiring and costly journey to work.

The British capital, one of the world's biggest financial centers, looks set to descend into chaos Wednesday as "Tube" drivers called another 24-hour stoppage, following on from last month's action.

"I had an important meeting on the other side of London to where I live. I couldn't get the tube so had to get a taxi at vast expense," Francis told CNBC, remembering last month's strike and how she had to travel from her home in Brixton in south London to the center of the city—a journey of around four miles.

"It took me ages to find a cab and when I did the company was charging surge pricing, which was double the normal cost," Francis said. "The journey also took twice as long as it should have as there were so many cars on the road."

Across the British channel, meanwhile, in Calais – one of France's busiest ports – French ferry workers have been blocking the port in recent weeks in protest over potential job cuts and are threatening further strike action.

Strikes at Calais have created chaos at the start of the busy summer holiday season in Europe, at a time when thousands of migrants are camped at the port and making nightly attempts to breach security measures and enter the U.K.

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£1B financial toll for UK

Apart from the human cost—one migrant died last week attempting to enter the Channel Tunnel linking France to England under water - this summer's strike action has also dealt Europe a hefty economic blow.

While industrial action, in general, has been on a downtrend in recent decades, analysts say discontent over job cuts and long-term structural reforms in some of the euro zone's big economies suggest strikes are unlikely to abate anytime soon, taking a toll on some of Europe's largest economies.

According to the U.K.'s Port of Dover, which handles about £100 billion ($156 billion) worth of trade a year and is a popular destination to and from Calais, the four days of strike action in Calais in early July cost the U.K. economy an estimated £1 billion.

Meanwhile, the British government estimates the daily cost of shutdown on the London Underground at more than £50 million.

Triggers

Analysts said that the main cause for recent strikes in Europe was discontent over pay, while in the euro area structural reforms are also a cause.

"Countries in the euro zone are under pressure to reform their economies, liberalize labor markets and open up markets to more competition. It's when you see changes like that that unions get angry and people are willing to come out on to the street and demonstrate," said James Howat, a European economist at Capital Economics in London.

"And when you look at the last few years, there have been lots of reforms during the euro zone crisis and there's still quite a lot that these countries need to do, so there's good reason to think it's (strike action) not going to go away anytime soon," he added.

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For instance, Italy's parliament approved an overhaul of labor laws in December, part of reforms aimed at lifting an economy that has contracted for three years in a row since 2012.

France's government has also pledged to press ahead with reform efforts and push down unemployment, which remains above 10 percent.

It's not just Europe that has been hit by industrial action. A port strike on the west coast of the U.S. caused disruption to the world's biggest economy earlier this year, while repeat strikes in the mining sector have dealt a blow to big emerging market South Africa.

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Back in the U.K., the median number of working days lost per strike rose to 171 last year from 154 in 2013, according the country's statistics office.

Protesting French employees block the railway tracks of the Eurostar Channel tunnel line on June 23, 2015 in Calais, France.
Philipppe Huguen | AFP | Getty Images
Protesting French employees block the railway tracks of the Eurostar Channel tunnel line on June 23, 2015 in Calais, France.

Public opinion

Chris Rowley, a professor of human resource management at Cass Business School in London and the Institute of Convergence Research at Korea University, said public perception about strike action can play an important role in the outcome of a labor dispute.

"Obviously it is a 'fine line' to walk between positions that the public's support (i.e. emphasising passenger safety, attacks on jobs and pensions, etc) and opprobrium (ie tube drivers on £50,000 demanding more pay)," he said.

In July, the U.K.'s center-right government unveiled plans to make significant changes to strike laws, aimed at limiting walkouts at key public services, in what analysts say would be the biggest shake-up of strike laws in 30 years.

Paul Hickin, who works in London's Canary Wharf financial district, said he may have missed out on a theater visit with his wife due to the London Underground strike, but was reluctant to heap blame squarely at the strikers' feet.

"I sympathize with the principal of striking," he told CNBC. "The problem is there is an ideology shift in the way we look at strikers, who tend to get the blame."