Alain Juppe’s radical economic reforms spark off a major row
EVERYONE knew it was coming. Yet French Prime Minister Alain Juppes plans to cut the accumulated social security deficit of 230 billion francs ($46 billion) by freezing wages for five million public employees and cutting retirement benefits sparked off the worst strike in the nation since the student-worker revolt of 1968.
Other features of the reforms include higher taxes, cuts in health subsidies and later retirement for government employees. Rail workers, for instance, would have to work for 40 years to get a full pension instead of 37-and-a-half years.
As the strike entered its 14th day on December 8, thousands of commuters were stranded in miles-long traffic jams caused by the lack of public transportthousands of others walked or used alternate means of transport like bicycles or even roller skates to get to work. Freezing cold and intermittent snow showers added to their misery. And if the unions are to be believed, things are going to get a lot worse unless Juppe scraps the reforms.
For Frenchmen long used to the acquis sociauxor acquired rightsgranted to them under Francois Mitterrands socialist rule, the proposed reforms hit them where it hurts, their pockets.
But Juppe and President Jacques Chirac face the devils alternative. If France is to continue its push towards the single European currency by 1999, it has to balance its books at home, and fast.
Under the Maastricht treaty, three strict economic criteria have been agreed upon for the monetary integration of the European Union (EU). The budget deficit is to be capped at three per cent of the member countrys GDP, the government debt is to be kept under 60 per cent of the GDP and interest rates and other monetary policies have to be synchronised with the common European Central Bank setting the base rate. But the European Commissions economic outlook, published last month, states that as it is most EU members are not on course to meet the economic criteria. While Germany, Luxembourg and Ireland meet the budget deficit target, France and Britain are expected to arrive at the benchmark this year.
After meeting Chancellor Helmut Kohl at the so-called Franco-German summit at Baden-Baden on December 7, Chirac announced rather bravely that they were committed to adhering to the schedule for creating a single European currency by 1999. But the possibility looks increasingly unrealistic.
It is a fairly simple deduction. In the 15-member European Union, Germany and France have been the most enthusiastic champions of single currency. But the troubles President Chirac is facing at the hands of the French labour unions makes it rather unlikely that he will be able to cut public spendingdespite the brave front that he is putting up for the moment.
In the latest strike, miners staged running battles with the police in eastern France, youths clashed with the police in Paris and riot police fired tear gas at the strikers at Paris Orly airport. As for the size of demonstrations, reports attributed to unions put the number of demonstrators in Marseilles at 100,000. Even in Bordeaux, Juppes area of influence, 50,000 are believed to have turned up at a demonstration.
The protests on the streets are echoing in Juppes Republican Party. Questioning the need for a common currency by 1999, former interior minister Charles Pasqua has called for a "change of policy". An opinion poll published the morning after the Chirac-Kohl meeting showed that three out of four French people want Juppe to open negotiations on his welfare system. The poll, published in the popular tabloid Le Parisien, indicated an overwhelming 59 per cent supported or had sympathy with the strikers.
So far, the French governments posturing vis-a-vis virtually an entire nation on strike is: the problem just doesnt exist. Prime Minister Juppe says the reforms would continue, and has declined to hold direct talks with the unions, saying he is only willing to discuss restoration of a certain minimum of transport services.
Perhaps the British, reasonably well prepared on economic grounds to move towards a unified Europe but extremely cautious and sceptical, may feel a little less isolated as the days go by. As The Guardian put it, the French are providing them with a "dry run" of what may be in store for them. in London