Analysis - Fragmented backlash against Europe's austerity

LONDON (Reuters) - Spending cuts and austerity measures might be beginning to bite across Europe, but so far any backlash has been fragmented, as opponents focus on making sure the axe falls elsewhere.

President of the European Commission-funded European Disability Forum Yannis Vardakastanis believes disabled people will be the first in line to suffer when it comes to spending cuts, but finds it harder than ever to make other groups care.

"There is competition amongst different groups in society to send the repercussions of the crisis to other groups," he told Reuters in his office in Brussels.

"This makes it difficult to make alliances. I have seen for example that trade unions used to speak more about disability issues but now they are just focussed on themselves. It's not a nice observation but it is what we should expect."

That is part of a larger picture. Britain's defence chiefs are in a thinly concealed battle to fend off cuts in their individual services at the expense of the others, construction firms lobby against infrastructure spending cuts, children's groups to protect education.

In the countries that are furthest ahead with cuts -- primarily emerging economies and Ireland, which has led the pack in Western Europe -- individual groups have had some success in reversing some proposed cuts.

The Irish elderly lobby marched through Dublin to push back suggested cuts to elderly medical benefits. In Bosnia and Herzegovina, the powerful civil war veterans' movement marched and blocked cuts to their pensions, imperilling an International Monetary Fund (IMF) deal.

In other western European capitals now girding for similar deficit reduction, lobbying firms find that dealing with cuts is the new preoccupation of their clients. But relatively few are willing to challenge the new orthodoxy.

MAKING THE CASE

"There is certainly an understanding that just saying 'you can't cut' isn't going to work," said Kevin Craig, managing director of London-based lobbying and public relations company PLMR. "There is a strong narrative coming from government and you have to work with that. But I can see lots of potential for backlash and anger in a couple of years time."

Craig's clients include small charities, firms and other organizations that could suffer heavily from spending cuts. For many, one option is to promote themselves as offering ways for the government to save money, he said. Tech and biotech firms might argue they deserve particular support as they represent the jobs of the future.

Some argue the drive to austerity in itself pushes groups to try to protect their own selfish interests, boosting both regionalism and support for extremists.

Certainly, Scottish and Welsh nationalist parties aggressively argued that during Britain's election they would use their potential influence in an inconclusive hung parliament outcome to exempt their regions from spending cuts.

There is little evidence this won them many votes -- but the prospect certainly alarmed bond markets.

Some see the crisis supporting the strong performance by the Dutch and the Hungarian far right and Belgian Flemish separatists in recent elections -- but others argue pre-existing local drivers were much more important.

There are signs coordinated opposition to austerity is beginning to grow, particularly among trade union movements who have organised Europe-wide demonstrations on September 29.

But few expect a concerted continent-wide prolonged campaign as unions too face divisions in their ranks.

In Ireland, unions say there was a deliberate attempt by right wing newspapers and policymakers to foster divisions between public and private sector workers, while other potential fault lines lie between local and foreign workforces, unionised and non-unionised labour.

TILTING THE BALANCE

Irish unions say outright that they deliberately shied away from widespread industrial action for fear of sparking a bond market meltdown that would have hurt everyone, while some Greek and other unions have urged widespread confrontation.

While union leaders often argue for a paradigm shift in crisis response addressing the deficit through taxing banks and the rich rather than cutting spending, most privately acknowledge they would settle for compromise.

"It's not quite a black-and-white choice between having a revolution and overthrow the government and just taking the cuts on the chin," said Andrew Watt, senior researcher for the European Trade Union Institute. "We're arguing for redressing the balance in a slightly different way."

A broader debate is just beginning. In newspaper articles, blogs and academic journals, some economists and thinkers are beginning to ask wider questions: Should markets be allowed to dictate policy? How unfettered should they be? What support should citizens expect from the state?

But most expect short-term pain to be the key driver of local politics.

"Political systems which have found it hard enough simply sharing out apparent growth now face the vastly greater challenge of allocating downside," Tim Morgan, global head of research at Tullett Prebon, wrote in a research note. "It will not be pretty, but it will certainly be interesting."

(Editing by Elizabeth Fullerton)