French workers protest at state sell-off scheme

John Lichfield
Tuesday 14 January 2014 05:28
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The spectre of a re-run of the damaging 1995 confrontation between government and unions hung over France yesterday when 80,000 people protested against the privatisation of state-owned industries and public services.

Yesterday's action was heavily supported by employees in the state electricity and gas companies but also by workers in Air France, the railways and the postal service. It was intended as a warning to the centre-right government of Jean-Pierre Raffarin, which is planning a privatisation programme, partly to help to balance the French budget. The demonstrations, especially those by railway workers, were also a protest against European Union plans to open state monopolies to competition.

About 60,000 people marched from the Place de la Nation in Paris and an estimated 20,000 joined similar protests around the country.

The marches were a reminder for Mr Raffarin of the winter of 1995 when strikes and demonstrations brought France to its knees and forced the last centre-right government to abandon its plans for reform of the state sector.

The comparison with 1995 may be unjustified. Seven years ago, the unions were able to tap a deep well of public resentment against the austerity policies of the government of Alain Juppé. The Raffarin government, elected in June, remains broadly popular.

In any case, the privatisation programme is on hold for other reasons. The collapse in world stock markets means that any sell-off of state industries, or public stakes in companies, would resemble a cut-price sale. Air France, for instance, which is 55.9 per cent owned by the state, was valued at €4.2bn (£2.7bn) six months ago. Despite its record as one of the few large airlines to be profitable, it is now worth €1.7bn.

The postponing, or scaling down, of the privatisation programme will have awkwardimplications for the country's deficit over the next few years. The European Commission is considering warning Paris because its tax and spending plans for 2003 threaten to break the guideline for countries within the euro.

The government, committed to its election promise to cut taxes, may be forced to take on the unions in a different way: by imposing cuts in public spending and staffing. Yesterday's demonstrations may therefore be a rehearsal for a confrontation next winter, rather than this one.

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