French Parliament to Vote on Sarkozy's Pension Bill

The French Parliament passed President Nicolas Sarkozy’s pension bill to increase the minimum retirement age as labor unions prepared for a new day of strikes and protests tomorrow.

The bill, under which the minimum pension age will go to 62 from 60 and the full-pension age to 67 from 65, was passed by the National Assembly by 336 votes to 233. The Senate passed the bill yesterday. While Sarkozy wants to enact the law on Nov. 15, France’s Constitutional Court may need more time to review it.

“Some will say Sarkozy won because he has passed a tough reform,” said Jerome Fourquet, a deputy director at Ifop, a Paris-based polling company. “But the reform caused so much pain it has created resentment and with any future reform, social unrest can be sparked again.”

Labor unions said protests and strikes over the bill, which have left the country crippled with fuel shortages and public transport disruptions, are far from over. They have called for strikes and marches tomorrow and more demonstrations on Nov. 6. Unions at French airlines and air traffic controllers have called for a separate strike on Nov. 4 to protest the bill.

French power plant workers are set to begin a strike at 10 p.m. tonight and may cut production of electricity, according to a representative of the CGT union. Strikes at oil terminals have left refineries without the necessary crude to process into fuels such as gasoline and diesel.

Photographer: Jacques Demarthon/AFP/Getty Images

“I am convinced that this reform will unite us eventually,” Labor Minister Eric Woerth told lawmakers at the National Assembly yesterday. “ Close

“I am convinced that this reform will unite us eventually,” Labor Minister Eric Woerth... Read More

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Photographer: Jacques Demarthon/AFP/Getty Images

“I am convinced that this reform will unite us eventually,” Labor Minister Eric Woerth told lawmakers at the National Assembly yesterday. “

France’s Civil Aviation Authority asked airlines to reduce flights to and from Orly airport in Paris by 50 percent, and those at other airports in mainland France by 30 percent.

Pension Deficit

“Voted or not, this problem isn’t over,” said Bernard Thibault, head of the CGT union. “Most of the unions that have suspended the strike are calling for a new meeting tomorrow,” he told Liberation newspaper today.

The full-pension age brings France closer to Germany and the U.S., which are moving toward setting 67 as the full- retirement age, according to the Organization for Economic Cooperation and Development.

“This reform won’t break France’s social pact,” Labor Minister Eric Woerth said in an interview with i-Tele after the vote. “In the name of the government, I am proud to have carried through a reform that in the common good.”

The risk premium on French bonds fell. Investors demanded 36.6 basis points more to buy 10-year French bonds than comparable German securities, down from 41.6 basis points on Oct. 12. The spreads were at 30 basis points on Sept. 6.

Sarkozy Popularity

The government says the pension changes are needed to help France cope with an aging population and balance the pension system’s budget by 2018.

The overhaul is part of the broader government struggle to cut the budget deficit. This year the gap will stand at 7.7 percent of gross domestic product, and Sarkozy’s ministers plan to narrow it to 6 percent, or 92 billion euros, next year.

Sarkozy’s two-month battle with unions and workers has hurt his popularity, which fell to a record low this month, with less than a third of those questioned approving his performance, an Ifop survey for the Journal du Dimanche showed Oct. 24. His approval rating fell to 29 percent, against 32 percent in September, the lowest since his May 2007 election.

The protests and strikes cost the country between 200 million euros and 400 million euros ($280 million to $560 million) a day, Finance Minister Christine Lagarde said Oct. 25.

Popular Support

Workers held their first strike on Sept. 7 when the National Assembly started debating the bill. Since then strikes and demonstrations have disrupted airlines and trains and brought about a million protesters to the streets during demonstrations. Blockades at oil depots left almost half the country’s service stations with shortages of some fuel products.

France’s eight remaining active refineries are either on strike or shut because of a lack of crude oil. Workers at the six Total SA refineries are on strike today and production remains halted, said Michael Crochet-Vourey, company spokesman.

“We’ve always said we don’t want to blockade the country, and once the bill has passed parliament our opposition will take other forms,” Francois Pelegrina, a representative at Total SA for the CFDT union, said in a telephone interview yesterday.

Meanwhile, protests against the bill still have widespread support, polls show. An Ifop institute poll for Ouest-France Dimanche newspaper showed that 63 percent of respondents supported the call for strikes tomorrow. That compares with 71 percent support before the previous strike on Oct. 12.

The same poll also found that 59 percent of the French say it’s unacceptable for strikers to block fuel depots or roads. The poll was conducted Oct. 21 and 22, with 956 respondents. Paris-based Ifop didn’t publish margins of error.

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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