Sarko Victory On Pension Change Signals New Dynamic For Social Reform in France     Print Email

Signs are that the weeks-long struggle over a new law to raise the retirement age in France is ending on the terms set by the French government and President Nicolas Sarkozy.

Today, amid lingering protests, the French parliament voted to increase France’s retirement age from 60 to 62, and 65 to 67 for full pension. France’s lower house, the National Assembly, voted in favor by 336-223 and the upper house, the Senate by 177-151, largely along party lines. But the real test of the proposal arose in the streets, in keeping with French political tradition. So the win would be bigger than it looks on paper.

The main significance of a Sarkozy victory resides largely in the simple fact that he won, breaking with a recent trend for French conservatives to cancel proposals that encounter stiff opposition from the French left, trade unions and students. This full-scale stand-off seems to mark the first such victory for a conservative French government on a major reform in more than a decade.

Since taking power in 1995 after a 14-year presidency of Socialist Francois Mitterrand, neo-Gaullist Jacques Chirac and his successor, Mr. Sarkozy, have repeatedly had to back down in the face of strikes, street protests and sit-ins aimed at defeating a string of social reform initiatives in the public sector, education and tax policy.

Sarkozy’s victory could reset expectations about what determined conservative leaders can achieve and about the limits on the veto power of French unions, which are relatively small in size but concentrated in parts of the public sector. This could encourage Sarkozy’s natural constituency among France’s center-right voters and the business community, encouraging them to believe that the government will push through its initiatives -- and encouraging them to stick with the government and not repeat the familiar pattern of making their own separate deals in anticipation of a government surrender.

This is the larger potential significance of today’s outcome. The particular issue at hand, the change in retirement age is relatively small and leaves the country with a comparatively early retirement age -- at a time when France, like other EU nations, is grappling with longer life spans and the resulting budget gaps on retirement benefits. So the impact of the law’s passage may be greatest, not in rebalancing France’s deficits, but in changing France’s political dynamics.

In this broader context, a big question is how well Sarkozy and his team handle the fall-out from the prolonged clash over retirement. The French president is emerging with a strengthened personal image as a leader with unshakeable determination, but his popularity is anemically low.

Many, including union leaders and social democrats, will be watching to see whether the Sarkozy team proves to be a productive player in the proposed dialogue about job-creation that was part of a package inducing the unions to back away finally from confrontation.

Most observers in Paris seem to expect that the government will be forced to abandon a set of tax breaks for higher-paid salaried people in France. Known as the “bouclier fiscal,” it capped the total share of a person’s income that must be taxed at 50 percent. Abandoning this ceiling (which seems high compared to neighboring countries) would run against the theme of cutting taxes that Sarkozy shares with many U.S. and other European leaders.  But it may prove a necessary concession to placate widespread anger at “inequality” – a mood fueled by recent scandals involving high profile celebrities among the very rich such as Lilliane Bettencourt, the heiress of L’Oreal, who has been accused of political payoffs to Mr. Sarkozy’s party.

That prevalent mood, further fueled by economic fears and by media coverage of the high-life enjoyed by some government ministers and most of all by Sarkozy himself – was a factor of animosity in the strikes about retirement. At some point, it seemed that this personal animus against the president might be a major roadblock to a settlement in the dispute.

In fact, as it played out, the strike has laid bare growing weaknesses in the power of “street action” and work stoppages by students and union militants. Although the protest movement followed the almost ritualistic pattern of “taking to the barricades” that have marked French political convulsions from 1789 to 1968 and even as recently as successful protests in 2007 against Sarkozy initiatives, the levers of extra-parliamentary opposition have been whittled down by an array of social changes.

One change is growing awareness among the French that they are facing some of the same pressures from globalization and demographics as their neighbors – and therefore cannot expect to avoid some of the austerity changes marking almost every EU country. In addition, France’s public sector is shrinking, a trend that diminishes the country’s already-small base of organized labor. New laws have largely eliminated some old advantages for strike movements: strike days are no longer paid, the subway and other forms of public transport must provide some form of “minimum service” to avoid a total commuting shutdown. Technology has changed the context, too: many people can now use their computers to work from home on some days during a strike, and many more French people have been incentivized to adopt motorcycles or bicycles for traveling around their cities.

These changes in context have led activists to recalibrate their approach.  Aware that their followers were reluctant to lose a day’s pay in a time of economic hardship, the unions sought to move some demonstrations to the weekend – a reversal of the old pattern of strikes during the week and holidays for strikers and police on the weekends. More significantly, the strikers adopted hard-line tactics in shutting down and barricading refineries and depots that supply gasoline to motorists. These targeted clamp-downs were effective in the short-run in causing lines at filling stations and even grounding air travel. But in the longer run, mounting public impatience with the strikes’ hardships enabled the Sarkozy government to use force against the blockades – in a small way, taking a leaf from the playbook of Margaret Thatcher in her showdown with trade union power two decades ago in Britain.

One French paradox still seems to hold true, however.  Public opinion support for the strikers remains high, despite the fact that the public at large was being held hostage to the demands of a minority of protesters. The explanation, now as before, seems to lie in two factors: a classic weakness on the part of French governments to explain and justify a planned reform in advance and also an enduring reflex on the part of French citizens to sympathize with strikers as “us” – who may be next in line to have something taken away by the government if it “gets away” with something this time.

And what about the big question – Sarkozy’s chances of winning re-election in 2012? Right now, his popularity has sunk to a new low, with barely a quarter of French people expressing support for him. But he still has two and a half years in office, an apparent victory to his credit and, at least so far, no really credible opponent from the left to frame the determinant issues for a presidential contest. And then, there’s always the gap between what French people tell pollsters and what French voters do in the election booth.


--European Affairs