National strike against pension reform paralyses France

A nationwide strike against a government plan to reform the pension system paralysed France this week.

The AP’s Angela Charlton and Sylvie Corbet had the news:

The Eiffel Tower shut down Thursday, France’s vaunted high-speed trains stood still and teachers walked off the job as unions launched nationwide strikes and protests over the government’s plan to overhaul the retirement system.

Paris authorities barricaded the presidential palace and deployed 6,000 police for what’s expected to be a major demonstration through the capital, an outpouring of anger at President Emmanuel Macron for his centerpiece reform, seen as threatening the hard-fought French way of life.

The Louvre Museum and other sites warned of strike disruptions, and Paris hotels struggled to fill rooms. Many visitors — including the U.S. energy secretary — canceled plans to travel to one of the world’s most-visited countries amid the strike.

Unprepared tourists discovered historic train stations standing empty Thursday, with about nine out of 10 of high-speed TGV trains canceled. Signs at Paris’ Orly Airport showed “canceled” notices, as the civil aviation authority announced 20% of flights were grounded.

Some travelers showed support for the striking workers, but others complained about being embroiled in someone else’s fight.

William Horobin from Bloomberg reported:

Emmanuel Macron’s push to transform France’s sclerotic economy is facing the ultimate test of presidents past: “la greve.”

In what has been the undoing of previous French governments, unions representing everyone from transport workers to lawyers, doctors, teachers and students are going on an indefinite “greve,” or strike, starting Thursday. The strike will disrupt rail transport, flights, schools and hospitals across France.

Threatening to bring the country to a standstill until the government backs down, the unions are opposing Macron’s plan for a top-to-bottom rebuilding of the pension system. While Macron has already barreled through reforms of tax and labor laws, history shows pensions won’t be nearly as easy. In 1995, Prime Minister Alain Juppe abandoned his pension-reform plan after strikes paralyzed the country for about a month.

“We have one of the best pension systems in the world, if not the best,” the far-left CGT union said on its newsletter site. “Yet the president has decided, purely out of ideology, to wipe it out.”

Coming just a year after the start of the Yellow Vest movement that drew violent protests over several Saturdays in Paris and other major French cities, the strike risks turning into one of the biggest challenges of Macron’s term. It’s also become a catch-all for the country’s discontent, with demands for everything from higher wages and lower gasoline prices to more environmentally friendly policies.

Macron, who announced 17 billion euros ($18.9 billion) of tax breaks to appease the Yellow Vest protesters, faces municipal elections in the spring — crucial to cementing his fledgling political party before the legislative and presidential votes in 2022.

Silvia Amaro from CNBC noted :

Prior to his election in 2017, President Emmanuel Macron vowed to reform France’s pension system. He believes the current arrangement is unfair, complex and costly. According to OECD data, France’s retirement system is one of the most expensive in the world, costing the government 14% of the country’s GDP (gross domestic product).

Macron is now pushing for a single, points-based system. At the moment, there are 42 different pension plans that vary according to profession and region, meaning some workers are entitled to a full pension before the general minimum retirement age of 62. The new system would mean that pensioners that contributed the same amount would have equal rights.

Tomasz Michalski, professor of economics at HEC Paris business school, told CNBC Thursday that for every 10 euros that a worker earns in income, that person will get one point under the new system. “But how will these points be translated into benefits?,” Michalski wondered.

The full details of Macron’s reforms have not yet been officially put to Parliament. Thursday’s strike is pre-emptive action and does not have an end date, meaning it could last for some time.

Previous attempts to change the pension system have also been met with strong opposition from public sector workers. In 1995, President Jacques Chirac ended up caving into union demands after his pension reform plans faced weeks of demonstrations.