France faces paralysis by public sector strikes

Workers in revolt: Union action will cripple country and intensify pressure on beleaguered government's economic strategy

Much of France will be paralysed today by a 24-hour strike called by seven unions representing five million civil servants, local authority employees, hospital staff and other public sector workers in protest against government plans to freeze their wages.

The industrial action is expected to be on a scale not seen since similar protests nine years ago, and represents the most serious challenge yet to the government of Alain Juppe, already buffeted by attacks on the franc and damaging revelations about his housing arrangements.

A degree of calm returned to the foreign exchange markets yesterday after the Bank of France raised its 24-hour interest rate from 6.15 per cent to 7.25 per cent. After an anxious morning the franc steadied against the German mark. But today's strike, and new evidence relating to Mr Juppe's role in the allotment to him of a luxury apartment owned by the city of Paris, left the markets wary of his future and that of the strong franc policy. "The franc is in no man's land," said Kit Juckes, currency strategist at NatWest Markets in London. "I don't think it will hold the line," said Paul Mortimer-Lee, chief economist at Paribas Capital Markets.

Schools, colleges and public transport are expected to be hit hardest by today's strike, originally called by fonctionnaires employed by the state, local authorities and hospitals after Mr Juppe told them they would receive no pay rise in 1996.

Other public sector workers - including railway and Paris public transport staff - decided to join, expecting that the government planned the same thing for them. They also want to display their muscle to the new government, appointed in May, in advance of negotiations over the future of the social security system.

Rail travellers were hit as the strike took effect last night. Only about a quarter of main-line trains were expected to run today. It was hoped that seven Eurostar trains would run from Paris to London and six in the other direction. Few, if any, underground trains will run in the Paris area, and bus services will be severely curtailed.

There will be few postal deliveries, though post offices should open. Hospitals will maintain emergency services, but they will be badly disrupted. Most government offices and town halls will be closed.

Teachers will be on strike, though some schools will open to supervise pupils who would otherwise be left alone at home. Marches are planned in Paris and several big cities.

Mr Juppe's announcement at the weekend that he is giving up the lease on his flat - the centre of controversy since it emerged that it was let to him at an artificially low rent while he occupied a senior post at the Paris city hall - has failed to silence his critics.

Yesterday Le Monde produced a further document challenging the claim that Mr Juppe had not abused his position to award himself the flat. It appeared to show that he did indeed have responsibility for the city's stock of flats at the relevant time, and may have benefited personally from his official position.

Respite for franc, page 23

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