French unions test Sarkozy in pensions strike
Ben Hall in Paris
Published: September 7 2010 09:46 | Last updated: September 7 2010 19:35
Marchers on the streets of Marseille take part in a national day of action against the government’s pension reform bill
The unions claimed 2.5m-3m people took part in scores of protests and strikes on Tuesday against the overhaul of the pay-as-you go pension system.
The police estimated turnout at 1.1m. Either way, it was significantly higher than the last protest in June, suggesting the unions had succeeding in turning up the heat on the government. Multiple strikes caused school closures and serious disruption to public transport, with three in five high-speed trains and half of all flights from Paris’s Orly airport cancelled.
Union leaders said they would hold further strikes this month unless the government agreed to drop the increase in the retirement age, the flagship reform of Mr Sarkozy’s presidency.
“If we are not listened to, there will be further protests and no form of action is excluded,” Bernard Thibault, the leader of the hardline CGT union told Europe 1 radio.
François Fillon, the prime minister, insisted the government would “hold the line” on raising the retirement age but promised to come forward with some limited concessions later in the week.
The unions’ show of force was timed to coincide with the beginning of the debate in the National Assembly of a pensions bill.
Eric Woerth, the social affairs minister, who is caught up in a party funding scandal involving France’s richest woman, told deputies the pensions overhaul was “one of courage and of reason”. But the Socialist opposition accused him of ramming through the reform without negotiation.
The reforms aim to plug a deficit in the compulsory, universal pensions system, projected at €42.3bn ($53.9bn) a year by 2018. France has the lowest pension age of any large European Union country and Mr Sarkozy is determined not to give in on the most totemic element of the reform: raising the pension age to 62 by 2018.
The reform is highly symbolic, given the failure of previous centre-right governments to overcome union and public opposition. It has also become a test of France’s commitment to long-term fiscal discipline.
However, the unions and centre left opposition are determined to defend the right to retire at 60 and insist that it could be paid for with higher taxes on business and the wealthy.
Amid a carnival atmosphere, hundreds of thousands of protesters marched through the Place de la Bastille in Paris demanding the government abandon reform. Families, students and many private sector workers joined hardened union members in defending their welfare rights.
But some of those taking part were under no illusions that the government would drop the increase in retirement age.
“It won’t be enough,” said Erich Behm, a France Telecom employee. “We’ll need a lot more of this to get this project withdrawn.”
However, the government is prepared to offer some more minor concessions, such as earlier retirement for those who have spent much of their careers in physically demanding jobs. But the markets and France’s EU partners are likely to take a dim view of more costly trade-offs.
Although the reform package would eliminate the deficit in the pensions system by 2018, the deficits would reappear from 2020, rising to 1.1 per cent of gross domestic product by 2030 and 2.3 per cent by 2050, according to figures from Barclays Capital.
As well as the age-related measures, the pensions overhaul includes a raft of tax-raising measures: an extra 1 percentage point of income tax for higher earners (from 40 to 41 per cent), higher taxes on dividend income and capital gains, and higher social charges on businesses.
http://www.ft.com/cms/s/0/89497238-ba5a-11df-8e5c-00144feab49a.html
