France Hit by New Strikes as Pension Reform Opposition Grows

  • In Business
  • 2023-01-31 09:11:52Z
  • By Bloomberg

(Bloomberg) -- French labor unions are leading a second day of mass strikes and protests on Tuesday against raising the retirement age in a test of the momentum driving defiance to Emmanuel Macron's signature economic reform.

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The country's rail operator, SNCF, expects only one-third of high-speed TGVs to run and urged people to work from home. Subway and commuter trains serving the capital were severely disrupted, with limited service on most lines. Many schools were also set to close.

Between three-quarters and all of the workers at TotalEnergies SE's refineries and fuel depots are striking, Agence France-Presse reported, citing the CGT union. Air France-KLM's French arm said it had scrapped 10% of short-haul flights.

Macron faced the biggest protests yet of his time as president on Jan. 19 when the country's usually fragmented unions united to bring more than 1.1 million people onto the streets. Polls carried out since suggest opposition is growing.

CGT union head Philippe Martinez told BFM TV there were signs that at least as many people will take part on Tuesday. He urged protesters and strikers to maintain pressure on the government, saying it had lost the ideological battle.

"They want to show determination, so they must face the same determination from our end." he said.

Macron has pledged to see his program through, and backing down would endanger a fundamental part of his strategy to steady France's deficit-ridden finances and improve the economy's capacity to grow and create jobs. If the latest 24-hour walkout shows signs that protest momentum is waning, however, it could make it easier to garner support in parliament for the bill, which includes a provision that would raise the minimum retirement age by two years to 64.

Read more: Strike-Hit Britain Is Starting to Look More Like France

Aside from turnout, the share of public sector workers on strike will be an important barometer of defiance. On Jan. 19, slightly fewer walked out than on the first day of demonstrations against a 2019 pension reform plan, which Macron ultimately dropped after the Covid pandemic struck.

The government will also be watching closely for signs of violence. According to newspaper Le Parisien, the march in Paris will likely be joined by between 1,000 and 1,200 activists from the Yellow Vest movement, whose anti-Macron protests, which began in 2018, often turned violent.

Opponents of raising the minimum retirement age point to 1995, when then President Jacques Chirac abandoned plans to change the pension system after prolonged disruption. More recently, governments have stood their ground, notably in 2010 when Nicolas Sarkozy raised the lower limit to 62 despite months of unrest.

Macron says reform is essential to avoid deficits in the coming years, especially as public finances are already under pressure from massive spending during the Covid pandemic and energy crisis. The International Monetary Fund said on Monday that the reform could help increase labor supply - another key objective of his government, given relatively low employment rates among older workers.

The National Assembly is due to start debating Macron's bill next week after the social affairs commission completes a review of more than 7,000 amendments. While the government says minor modifications are possible, Prime Minister Elisabeth Borne has insisted the increase of age thresholds is "no longer negotiable."

The main labor unions will meet in Paris on Tuesday evening to decide their next steps, with further days of action all but inevitable as they seek to keep pressure on lawmakers debating the proposed legislation in coming weeks.

"Madame Prime Minister, you are a reasonable and respectable woman: listen to the discontent with 64 years that is everywhere," Laurent Berger, leader of the moderate CFDT union, said on France 2 television on Monday. "Back down on this measure and we can talk again."

Macron's task is made harder after he lost an absolute majority in elections last year. His government has tried to secure the support of the conservative Republicains, who have traditionally backed increasing the retirement age, but some have expressed doubts since the first day of protests.

The government could ultimately use special constitutional provisions to bypass a vote in parliament, but in doing so would expose itself to a possible no-confidence vote and risk further stoking the anger of protesters.

--With assistance from Samy Adghirni.

(Updates with union comment starting in fifth paragraph)

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