Raffarin's reform strategy in ruins as half a million march

The French government faces a prolonged and damaging battle with state employees and militant unions over pensions after a march through Paris yesterday by 500,000 people - one of the biggest protests seen in the capital.

The argument is over plans to reform the country's generous retirement arrangements (especially generous for state employees) which are likely to collapse over the next decade.

But the magnitude of yesterday's marches - the unions claimed more than one million people in Paris, which would have made it the largest demonstration for more than 40 years - suggests that the revolt has now gone much further than pensions. There were also protests in other French cities.

The centre-right government of Jean-Pierre Raffarin, the Prime Minister, is now confronted by precisely the dilemma it has manoeuvred to avoid: a head-on collision with militant unions and public-sector workers over its step-by-step plans to shrink, modernise and de-centralise the French state.

The French Cabinet must now decide on Wednesday whether to stand firm and press ahead with its pension reform plans, which have already been accepted in amended form by two moderate trades union federations. If it does so, the four militant union federations that called yesterday's marches are threatening indefinite transport strikes from this Sunday and an extension of the guerrilla warfare by teachers, which threatens to disrupt the baccalaureate and other school examinations.

Disturbingly for M. Raffarin, there is no sign of the French public turning against the revolt by the state employees. A poll published in Le Parisien newspaper suggested that two in three French people regarded yesterday's march as a legitimate defence of the social status quo.

Little more than a year ago, a disgruntled French electorate was complaining that politicians did not keep their promises. M. Raffarin was elected on a ticket of law and order, lower taxes and reform of the state. In attempting to push through the third of those promises, M. Raffarin finds himself opposed in the street, and in the polls, by a majority of French people, who complain that politicians do nothing while in power.

M. Raffarin is under pressure from right-wing commentators, from MPs and the employers' federation to dismantle this vicious circle.

The Prime Minister had hoped to avoid the prolonged strikes and street protests that buried the previous attempt to reform pensions arrangements for state employees in 1995. He had made concessions to buy off the more moderate unions.

He had excluded from the reform the even more generous pensions deals of rail, Metro and electricity workers. Finally, he had tried to convince employees in the private sector that their own, less generous retirement terms would be left mostly untouched until 2008.

His strategy was to create "firebreaks" between different interest groups to try to prevent the kind of conflagration that wrecked the previous centre-right government in the winter of 1995. The strategy has failed. Although rail and Metro workers have been promised that there is no threat to their own pension deals, transport workers were in the forefront of the marches yesterday and are threatening to organise more strikes.

M. Raffarin had hoped to use pensions reform - which most people accept is necessary - as the start of a wider reform of the state apparatus, including the non-replacement of one in two retiring civil servants and the transfer of administration tasks to local government.

The militant unions have turned his strategy against him, persuading their members that pension reform is just the beginning of an assault on state workers, public services and the standard of living of the working classes.

Bernard Tibault, secretary general of the Conféderation Générale de Travail (CGT) union federation, warned yesterday that the Paris march was "the beginning of a profound movement, which is strengthening day by day. Everyone knows that the choices being made today will shape the lives of employees for decades."