Putting the Lid on Europe’s Holiday Inflation
With so many European holidays, will the European market ever be open for business?
March 22, 2000
As Americans are sorely aware, most Europeans get at least twice as many annual vacation days as U.S. workers. On top of that, most European nations have an enviable number of public and religious holidays. Together, this generous assortment of vacation days and holidays is making it hard for European companies and markets to compete in this age of globalization.
How then to put the genie back into the bottle? No European policy maker would dare ask workers to sacrifice their holidays in the name of Europe's economic integration. But, following the lead of some top U.S. officials, they could easily — and justifiable — pin the blame on globalization. If Europe as a whole is to regain its competitive footing, it will need to work more — and vacation less.
For example, with almost every nation having a slightly different set of legal holidays, how many days are left during which one can keep the entire European banking system open? And how about the stock exchanges? If the Paris, Brussels and Amsterdam exchanges follow through with their plan to merge, will investors have to stop to observe each country’s holidays?
As pressure mounts to harmonize European tax rates, interest rates and the many other economic differences from country to country, we propose a process of “vacation harmonization” that will allow only the holiest of holidays — a short list of holidays that most countries already have in common — to remain.
Last year, Germany — usually one of the worst offenders on the vacation front — took a first step in that direction. For the first time, the regional stock exchanges in Stuttgart, Munich, and Düsseldorf stayed opened on All Saints’ Day — November 1 — an official holiday only in Germany’s predominantly Catholic regions.
Similarly, the Frankfurt stock exchange offered to shed four holidays from Germany’s cache of 16 legal holidays to be more in step with its European competitors. Otherwise, the reasoning went, trading orders usually processed in Frankfurt might simply be routed to open exchanges in neighboring countries.
In practice, however, expect each country to ruthlessly defend its own set of holidays. For instance, can you really imagine that the French would give up their July 14 holiday — commemorating the storming of the Bastille — even though no other European country shares that holiday? Or, should French workers take off and leave the day’s work to the Dutch, Germans or Spaniards?
So while it might be premature to say that European integration will put a lid on Europe’s vacation inflation, it is clear that Europe should become more competitive when its workers are paid to work — rather than to take holidays. At the very least, it gives us just one more thing to blame on that convenient scapegoat — globalization.