Angered by PM's remark, French unions talk strikes

By Madelaine Drohan, Paris, The Globe and Mail, 22 May 1996

Labour quick to answer Juppe's pledge to cut ‘fat’ from civil service work force by threatening to follow Germans and stage series of walkouts.

French labour unions are threatening to stage a sequel this week to the crippling strikes of December after Prime Minister Alain Juppe angered the powerful civil service unions by vowing to the fat from their ranks.

The Prime Minister's remark infuriated union leaders who responded by calling national demonstrations for tomorrow and stepping up demands for a shorter work week, higher pay and stronger economic growth.

You can't manage France with a computer, said Marc Blondel, head of the Force Ouvriere union. You manage it with the heart and with the mind. The labour leader said France is becoming an Anglo Saxon society, a codeword for the cut-throat capitalism and lack of social support the French say they detect in Britain and the United States.

The labour unrest in France echoes what is happening in Germany. Postal and transport workers are staging strikes to back their demand for a 4.5 per cent wage increase for Germany's 3.2 million public service workers.

The German government's attempt to rein in spending has met with widespread resistance in the labour movement and union leaders are threatening to escalate their protest this week. Postal services and some transport were hit yesterday. Today it will be the hospitals and universities. Tomorrow, transport is targeted again.

It looks as if the French unions are prepared to throw down the gauntlet again, economist Paul Horne of Smith Barney Inc. said. Unions here are looking at unions in Germany. The two are not co- ordinating, but are aware that their protests will have added impact if they go on simultaneously.

Mr. Jupppe and German Chancellor Helmut Kohl are having these problems now because both are moving to get their debt, deficits and inflation rates in line with criteria set for countries wishing to join a single European currency in 1999. A report from the European Commission, the bureaucracy for the 15- member European Union, said last week that both France and Germany were on track to meet the criteria although they are not there yet.

Even without the currency deadline, France would have to make economic changes for the simple reason that unemployment remains stubbornly high at 11.9 per cent in March and the economy is not growing fast enough or producing enough jobs to bring this figure down. In Germany, the jobless rate was 10.4 per cent in April. In Canada, the rate is 9.4 per cent.

The labour unrest in France and Germany shows the problems facing ministers from the 27 members of the Organization for Economic Co-operation and Development who are in Paris this week to discuss unemployment.

Two years after the OECD brought out its jobs study that analyzed the problem of unemployment, there has been little progress made in reducing the number of jobless. Jean-Claude Paye, outgoing secretary- general of the economic think tank, acknowledged Monday that the outlook is bleak.

Yet even as the number of jobless remains unsustainably high, more workers are facing unemployment as corporations and governments reduce their staff. In France, the 2.08 million civil servants are feeling especially vulnerable as the government pursues its strategy of privatization. There has been a steady stream of government enterprises earmarked for the private sector.

Mr. Juppe said he would like to see the civil service drop by about 10,000 jobs a year through attrition. This, plus earlier attempts to trim retirement benefits and reduce spending, has attracted the ire of the unions.

An update on the jobs study released by the OECD yesterday cautions politicians facing resistance to tough economic measures to stay the course. There is nearly always resistance to pushing through structural reforms, even if the economic case for reform is accepted, the study concluded. It warned that governments must summon the will to deal with vested interest groups if they are to put in place policies that will benefit the whole of the population. The fact that unemployment is against increasing in a number of OECD countries from record levels underlines the importance of pushing ahead more rigorously.

While the report does not single out France or its civil service unions, they are among the vested interest groups opposing economic reforms. How the government handles this latest flare-up will be key to whether it will get its fiscal house in order in time to join a single currency.

Dominique Perben, the minister responsible for the civil service, tried unsuccessfully to dampen the anger of the unions by explaining that Mr. Juppe didn't mean to say they were fat now. He said he preferred to have a smaller and more efficient public service in the future than one with excess fat, Mr. Perben said. The unions dismissed this as a feeble explanation.

They will find little support for their stand in the OECD jobs update. It also calls for more labour market flexibility, for making it more worth while for people to work than to collect benefits, and for the type of labour market policies more often described as a trampoline rather than a safety net. These encourage workers to get back in the labour market as fast as possible rather than cushioning their fall when they lose a job.

The ministers at the OECD also looked at the question of whether labour standards—such as outlawing child labour or ensuring health and safety regulation were adequate—had an impact on an individual country's trade position. The United States has been pushing to have an international agreement on labour standards even since negotiations for the North American free trade agreement made it a hot issue there.

But the report finds few links between trade flows and labour standards. Nevertheless, Jeff Lang, the deputy U.S. trade representative, said Washington will push to have a working group set up to further examine this question when members of the World Trade Organization meeting in December in Singapore.