No Letup in French Strikes Over Pension Reform

(CN) — Long-running strikes by trade unions over French President Emmanuel Macron’s push to overhaul the nation’s retirement system will continue despite a compromise offer by the government.

Prime Minister Édouard Philippe this week offered to take off the table — at least temporarily — a rise in the retirement age from 62 to 64. His compromise was aimed at appeasing France’s largest union, the Democratic Confederation of Labor, but it’s unlikely to quell resistance among the country’s far-left unions that want the government to scrap its plans altogether.

The strikes began on Dec. 5 and have become the longest in France’s modern history. Friday was the 44th day of strikes, which are mostly affecting trains and subways in Paris. But France also has seen mass protests drawing hundreds of thousands of people onto the streets on six occasions in response to calls by unions for a “day of action,” a journée d’action.

Striking workers march in Paris on Jan. 9. (AP photo)

The militant General Confederation of Labor, known by its French initials CGT, is calling for the strikes to continue next week and is urging workers to take part in another journée d’action next Friday. On that day, the government’s Council of Ministers is scheduled to meet and propose a draft bill for the pension overhaul.

The CGT, formerly affiliated with France’s Communist Party, wants the government to ditch its plans and preserve a system of pensions that rewards many public workers with generous early retirement for physically and mentally demanding work. Among those who feel they stand to lose a lot under the proposed changes are teachers, train workers, sailors, miners and ballet dancers.

The government wants to replace France’s system of 42 regimes with a single, points-based one. Philippe aims to get France’s parliament, the National Assembly, to pass legislation overhauling the system before summer.

This standoff is a major moment in France over the country’s future. Macron, a pro-business president and former investment banker, says his proposals will make France more competitive and business-friendly.

But France’s striking workers say the changes will make them poorer and force people to work longer. Instead of changing workers’ pensions, left-leaning unions want the government to increase taxes on corporations to keep the country’s welfare system solvent.

Macron’s government says the changes are necessary to make sure France’s pension system does not run up large deficits. Macron and his supporters have cited a government estimate that predicts France will face deficits of $8.7 billion to $18.9 billion by 2025 from pension payouts if nothing is done.

But this scenario — often touted by Macron’s government and the media — is just one of several forecast by an independent government council studying France’s retirement system, the Conseil d’Orientation des Retraites.

Under other scenarios, the council forecasts that pension deficits will actually shrink by more than $5 billion by 2030. In fact, the council has found that the cost of pensions has stabilized and it said its worst-case scenario was related to cuts the government has made to state-funded pension regimes — precisely those pension schemes now under attack.

Raising the age of retirement to 64 was meant to provide the cost savings the government says will be necessary to keep the pension system from running up deficits.

With that proposal off the table, Philippe has given union leaders and employers until the end of April to come up with new funding sources to keep the pensions system balanced by 2027 without cutting pensions or increasing labor costs. If an agreement cannot be reached, the government may seek once again to raise the age of retirement.

Antonio Barroso, an analyst with the London-based political risk firm Teneo, said in a briefing note that Philippe’s compromise “is aimed at dividing the trade unions and reducing the level of resistance to the policy changes.” He said the move makes it more likely the reforms will pass.

The compromise is chiefly aimed at the French Democratic Confederation of Labor, which supports introducing a single points-based pension regime. It opposes raising the age of retirement, the so-called “pivot age.”

For now, it appears that the government’s strategy is working. This week, French media reported that the number of strikers has diminished and that public transport in Paris is improving.

But there are dangers too for Macron. The strikes could intensify again if unions and employers are unable to agree on how to fund the pension system without raising the age of retirement and the government goes ahead and raises the pivot age to 64.

Politically, too, the strikes are reinforcing the image of Macron as a president who favors the wealthy. Macron, who faces re-election in 2022, has struggled with low approval ratings since the summer of 2018. Support for the strikers and opposition to the pension reforms remain strong.

The strikes also can be seen as a continuation of the yellow vest protests that erupted in November 2018 against Macron and which continue today, albeit in much reduced numbers.

The protests and strikes underscore anger in France over Macron’s policies. After taking office in May 2017, Macron scrapped a wealth tax and made it easier for businesses to hire and fire workers. He then ignited fury when he introduced a tax hike on fuel as part of his plans to tackle global warming. The tax led to the yellow vest protests and wild, violent clashes between police and protesters in Paris that left many people seriously injured.

What began as protests against the fuel tax morphed into a general backlash against Macron’s policies. Today, Macron is viewed by many French as a neoliberal politician attempting to privatize and dismantle France’s hard-won welfare system.

The boss of the CGT union, Philippe Martinez, recently described Macron as a French version of Margaret Thatcher. This was not the first time Macron was compared to the former British prime minister, who crushed a strike by miners in the 1980s and ushered in an era of free-market policies in the United Kingdom.

(Courthouse News reporter Cain Burdeau is based in the European Union.)

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