French Workers Strike in Unions' Stand on Pension Bill

Train services were disrupted and flights canceled after French unions called for a fifth, and some said final, strike today against President Nicolas Sarkozy’s pension bill, passed by parliament.

Unions are divided about the course of action after the lower house of parliament yesterday cast its final vote, approving the bill that will raise the minimum retirement age to 62 from 60. The bill must now be vetted by the Constitutional Court before it is promulgated into law by Sarkozy.

“Since there are no signs that Sarkozy will back down, the challenge for the unions is to find a way to wind down the protests without losing face,” said Guy Groux, an expert on labor movements at Cevipof, a Paris-based political research institute. “It’s clear the protests will peter out.”

Still, unions have said they will continue to push for concessions until the retirement plan is signed into law. “Workers don’t want to work longer and they don’t want to be the ones paying the bills for the financial crisis,” Jean- Claude Mailly, head of the Force Ouvriere union, said on France Info radio today.

About 2 million people marched in more than 200 protests across the country, the CGT union said, while police estimated the number at 560,000. The previous strike day Oct. 19 drew 3.5 million people according to unions and about 1.1 million according to police. Independent media counts at previous protests agreed more with the police numbers.

Unions leaders had expected fewer people today because of school holidays and because the law had passed parliament.

In Line

About 30 percent of flights from Paris’s Charles de Gaulle airport were canceled today. Train services were disrupted, although less than in previous strikes. Protests at oil terminals left refineries without the necessary crude to process into fuels such as gasoline and diesel.

Workers at power plants cut electricity production and this morning turned the lights out at the French finance ministry, the Confederation Generale du Travail labor union said in an e- mailed statement today.

Unions have called for another day of protests on Nov. 6.

The bill, which also raises the full-pension age by two years to 67, would bring France closer to Germany and the U.S., which are moving toward 67 as the full-retirement age, according to the Organization for Economic Cooperation and Development.

While Sarkozy wants to enact the law on Nov. 15, France’s Constitutional Court may need more time to review it.

‘Empty Cash Box’

The government says the changes are needed to help cope with an aging population and balance the pension 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.

“Unlike in earlier stand-offs, the government didn’t back down this time because it couldn’t,’ said Bernard Vivier, director of the Superior Institute of Work, which trains labor negotiators. ‘‘The cash box is empty.”

The risk premium on French bonds has fallen as the protests ease. Investors demanded about 37 basis points more to buy 10- year French bonds than comparable German securities, from 41 points on Oct. 12. The spreads were at 30 points on Sept. 6.

Seven out of 11 refineries are operational in France, even though some are still idled by lack of crude, Jean-Louis Schilansky, director of the UFIP, a refineries industry group, said today on France Info radio. Earlier this week, all active refineries were on strike or idle. Over the past week, workers at five refineries have voted to end strikes.

Planes, Trains

Schilansky said that 20 percent of French gas stations are still dry, mostly in the west of the country and in the Paris region. Close to half were out of products earlier this week. There are no blockades at any fuel depots, he said.

At the Port of Marseille on the southern Mediterranean coast, 38 crude oil carriers and 29 oil-product tankers are stranded because of a more-than-month-long strike, port agents Inchcape Shipping Services said.

Electricite de France SA imported 6,800 megawatts of power to help cover an 8,000 megawatt output drop from French plants since last night because of strike action, the CGT said.

France’s Civil Aviation Authority asked airlines to reduce flights to and from Orly airport in Paris by 50 percent today, and those at other airports in mainland France by 30 percent. Air France-KLM guaranteed all its long-haul flights, while canceling some domestic and European flights.

Costs

The national railroad said four out of five high-speed trains ran, as did about three out of five regional and Paris commuter trains. That’s double the service on previous strike days. Eurostar services to London ran normally.

The Paris metro said it ran near normally today, with the RER suburban line that serves the capital’s two airports running at half schedule.

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.

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.

The main protest in Paris drew 160,000 people according to the CGT and 31,000 according to the police, in both cases about half the number Oct. 19.

Strike Fatigue

“There’s a certain fatigue, there are the school holidays,” Force Ouvriere’s Mailly said.

Still, even before the final vote yesterday, the protests had begun to wind down as workers elected to go back to work.

“No matter how you look at it, it is a defeat for the unions,” said Groux, the labor expert. “They held numerous strikes, mobilized a lot of people, and can’t really point to any achievements.”

Francois Chereque, head of the CFDT, France’s second- largest union, has said he won’t call for protests after the pension bill becomes law.

Instead, he’s agreed with the head of the country’s business lobby to open negotiations on creating more job opportunities for youths entering the labor market and for seniors at the end of their careers.

Groux said other union leaders will try to find similar exits. The CGT union said it will work more at the company level to force deals allowing for early retirement for people in hardship jobs.

Unpopular Sarkozy

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 loss of confidence in this government runs very deep,” the CFDT’s Chereque said on LCI television this morning.

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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