Juppe pushes on with welfare shake-up

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Reform of the French welfare system, which precipitated three weeks of strikes and protests in the closing months of last year, will be rushed into law in the next few weeks following the removal over the weekend of the last legal and administrative obstacles to its progress.

The Constitutional Council ruled that the government of Alain Juppe was within its rights to introduce the main reform legislation by ordinance rather than by standard parliamentary procedure of bills and debates. Opposition Socialist MPs had asked the council, which has the last word on constitutional matters, to rule on the constitutionality of accelerating such important legislation in this manner.

Earlier, they had employed blocking tactics to delay preliminary legislation. With the green light thus given, the government published its first two draft ordinances on New Year's Eve, hours after the council had pronounced.

One concerns imposition of a new tax to help pay off the welfare system's accumulated debt; the other sets a 2.1 per cent maximum for increased spending by hospitals and GPs and makes minor changes in reimbursement arrangements for some doctors.

Most practical obstacles to the reforms have also been removed. The "social summit" convened by Mr Juppe on 21 December gave the unions what they had wanted in terms of recognition and a largely symbolic role in decision- making.

They had already obtained a pledge that all early-retirement arrangements in the public sector would be retained, the suspension of a committee set up to consider changes to public-sector pensions and abolition of a restructuring plan for the nationalised railway company.

The strikes, which paralysed the country until mid-December, are almost over. Public-transport workers in Marseilles, whose strike was yesterday in its 26th day, are still holding out, but their particular grievance relates to local terms and conditions of employment, not to the welfare reforms as such. The postal sorting workers in Caen, whose strike was broken by riot police just before Christmas, are back at work.

While the more militant trade union leaders have warned that the strikes could begin again at any time if the concessions granted by the government do not materialise, one of their number, Marc Blondel, of the Force Ouvriere, sounded a distinctly conciliatory note yesterday. He commented approvingly on President Jacques Chirac's New Year message, which had contained some "openings". In particular, the unions now believe they will be consulted in the drafting of further reform ordinances.

The new conciliatory tone, however, does not alter the fact that, despite all the concessions he made, Mr Juppe has retained the core of his welfare- reform legislation intact and that he clearly enjoys Mr Chirac's support. The President's tribute to his "courageous action" in his New Year message showed approval for what he was doing, even if his call for more dialogue implied criticism of how he had set about it.

The result is that, as of yesterday, most French people with jobs, and richer pensioners, will find themselves worse off. The new tax will cost them 0.5 per cent of total income, including hitherto exempt savings income. They will pay higher national-insurance contributions and much higher "hotel" charges for hospital care. However, Mr Juppe's first two ordinances have expressly left the delicate subject of health-service reorganisation and proposed sanctions on overspending doctors for further discussion. Those could well be the next - and bitter - battles.