The Big Question: Why are there so many strikes in France, and will the unions win?

(AP)

Why are we asking this now?

A strike by railway, Paris transport and power workers (and Opera and theatre staff) will go into its third day today. The strikes seem to be weakening but many militants still want to hold out until next week and "converge" with separate, public sector strikes over pay and job cuts planned for Tuesday. Students are also blocking campuses in protest against changes in the way that universities are funded in France.

Could this become a defining battle?

Yes, but not necessarily in the way that President Nicolas Sarkozy's more right-wing supporters – both in France and abroad – would like to think. The dispute has been billed as a test of M. Sarkozy's reforming nerve and zeal. In his successful campaign last Spring, he promised "rupture" with the past and an end to the piecemeal reforms of the last three decades. Many of his centre-right supporters hoped that the strikes would provide his "Thatcher moment": an opportunity to face down forces for social and economic immobilism in France.

The more militant union leaders also seemed to welcome a street confrontation to teach an all-conquering M. Sarkozy that he cannot easily rip up social rights which go back many decades. Both the government and the principal union leaders have now agreed to look for a negotiated settlement over the next month. In other words, both M. Sarkozy and the trades union leadership want to avoid a symbolic confrontation of Right v Left or President v Unions on the question: "Who runs France?" It remains to be seen whether the more militant, or aggrieved, grass-roots workers will agree to suspend the strikes today while negotiations proceed.

What is behind the present strikes?

M. Sarkozy wants to reform – not abolish, as he originally suggested – special pension rights acquired by 500,000 workers on the railways, in the Paris Metro, in the gas and electricity industries but also in the Paris Opera and the Comedie Francaise.

Public and private sector pensions regimes have been partially reformed in recent years, to avoid the looming bankruptcy of the system. The special deals, which allow retirement at 50 or 55 on full pensions, have been left alone. President Jacques Chirac tried to reform them in 1995 but backed down after three weeks of transport strikes brought France to its knees.

The issue may seem technical. It is far from the most pressing issue facing a country with stuttering growth, falling purchasing power, high unemployment and deeply overdrawn public finances. The special pension regimes have, however, become a symbol of France's resistance to reform. They are also emblematic of an issue stressed over and over by M. Sarkozy during his campaign: systematic early retirement and the 35-hour week mean that France, as a nation, works less than other nations. France works, on average, 617 hours a year per man, woman and child, according to OECD figures, compared to 800 hours in Britain.

What are the pension arguments about?

Each of the special pension regimes has its own peculiarities. Broadly speaking, workers in these regimes have to pay into the state pension funds for only 37 years and six months to retire on a full pension. All other French workers have to contribute for 40 years. The railwaymen, and others, say their jobs are arduous and unsocial and not especially well paid. Good and early pensions are part of the "covenant" which persuaded them to take on the work. This is true up to a point, but the days of shovelling coal into steam engines are long gone. Why do French engine drivers still retire at 50? In fact, the compromise offered by M. Sarkozy would allow all the special regimes workers to continue to retire early if they wanted to (but railwaymen would no longer be forced to do so). The President insists that everyone must in future (from 2012) contribute to the state pensions' fund for 40 years. If you retire early, your pension will go down. The more militant unions and workers are insisting on 37.5 years, with full pensions.

So what is happening now?

Until the eve of this week's strikes, there was a complete stand-off. The government said it was up to the unions to negotiate the small-print with their individual industries. The second largest union federation, the Confederation Generale du Travail (CGT), said it would only negotiate as part of a national conference of all unions, industries AND the government.

On Tuesday, the leader of the CGT, Bernard Thibault, suggested a compromise (to the fury of some of his own members). He would accept industry by industry talks so long as the government was represented at each negotiation. The government agreed and set a one month deadline for the talks to conclude.

M. Sarkozy is still insisting on a 40-year contribution period. He needs this in order to claim a paper victory. But he is offering to sweeten the pill with a cat's cradle of bonuses and higher pay for older workers and other concessions. In other words, he is trying to avoid a social train crash, not to cause one, as some of his supporters had hoped.

Are the unions united?

One of the great myths about France is that the unions are strong. There are 2m union members, out of 22m French workers. Even in the state sector, membership is falling. Only one in three railwaymen and women belongs to a union (but two out of three went on strike on Wednesday) Union members are scattered between eight different trades union federations, which are like eight competing TUCs with differing shades of political opinion.

What happens next?

The more moderate unions want to suspend the strike. But mass meetings at most railway and Metro depots voted yesterday to continue it and to demand more government concessions. Significantly, however, support for the stoppage is weakening. More than half of all railwaymen worked yesterday, compared to only one in three on Wednesday.

Is this a watershed moment?

All indications are that M. Sarkozy – for all his bravado – will be more like a Chirac II than a Thatcher a la Francaise. In other words, he will be another piecemeal reformer but perhaps a more energetic and determined one than his predecessor. France is not Britain. Gradual, negotiated reform, rather than a Big Bang, may be the only sensible route forward.

So is this Sarkozy's 'Thatcher' moment?

Yes...

* Sarkozy looks like pushing through some sort of 'special' pension reform, something which eluded his predecessors

* Sarkozy may not be a French Thatcher but he has the energy – and the caution – to get things done

* Most of the union movement – and the nation as a whole – has now accepted that social and economic reform is inevitable

No...

* Sarkozy has bottled out of a head-on confrontation and will now lose momentum.

* One set of "special" arrangements will be replaced by another. French business as usual.

* All the hard decisions - notably on public spending - are still to come.