Sarkozy, French Unions Head for Showdown on Plan to Raise Retirement Age

French unions set a pair of demonstrations against President Nicolas Sarkozy’s plan to raise the retirement age as the government rejected retreat. Protests on Oct. 2 and 12 would follow strikes yesterday and Sept. 7.

“We warn the government not to ignore growing anger in the streets,” Nadine Prigent, a member of the executive board of the CGT union, told reporters today.

Speaking to a party rally in the Atlantic town of Biarritz, Prime Minister Francois Fillon said he won’t bow to union demands to withdraw the pension bill.

“Governing involves listening to everyone but sometimes it also involves saying ‘no,’” Fillon said. “We will not withdraw the reform because it is reasonable and necessary.”

The Senate begins debating the proposal Oct. 4. The National Assembly this month passed Sarkozy’s pension bill, which raises the retirement age to 62 from 60 and the age for a full pension to 67 from 65. Unions want the retirement age to stay at 60. The government says it has made enough concessions to allow people who started work as teenagers to retire at 60.

Nationwide, police said 997,000 people marched in more than 200 demonstrations yesterday, down from 1.1 million two weeks ago. Unions said 3 million people marched, up from 2.7 million.

The Oct. 2 strike and demonstration will take place on a Saturday. Francois Chereque, head of the CFDT union, has argued for a Saturday protest, saying it won’t penalize workers who don’t get paid for strike days and will encourage participation.

Fewer Strikers

Both sides agreed there were fewer strikers yesterday. The Paris metro system said operations were close to normal, with service at 85 percent. The number of strikers among postal workers and teachers fell.

La Poste, the state-owned mail and banking system, reported 16.5 percent workers struck, down from 23 percent on Sept. 7. The Ministry of Education reported 25.8 percent of teachers on strike, down from 29 percent.

The state pension fund will lose 10.7 billion euros ($13.6 billion) this year, with the shortfall reaching 50 billion euros in 2020 without a change in policy, according to the Budget Ministry. Unions and the opposition Socialist Party want to plug losses through higher taxes on capital and on high earners.

Opposition to tighter pension rules sparked extended strikes in 2003 and 2007. In 1995, President Jacques Chirac dropped an attempt to eliminate retirement privileges for transport workers after walkouts crippled the country.

France’s legal retirement age has been 60 since Socialist President Francois Mitterrand cut it from 65 after his 1981 election. Germany decided in 2007 to raise its retirement age gradually to 67 from 65. Spain and Italy have also increased their retirement ages to 65 to address the squeeze of longer life expectancies and declining birth rates.

To contact the reporters on this story: Helene Fouquet in Paris at hfouquet1@bloomberg.net; Gregory Viscusi in Paris at gviscusi@bloomberg.net

To contact the editor responsible for this story: James Hertling at jhertling@bloomberg.net

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