Unrest mars ‘Tour de France’

Date: 10/10/1996

By Jean Louys

AUTUMNS have tended to be rather hot in France these past years, at least in social terms.

Last year the whole country was paralysed by strikes, and storms are now gathering as the trade unions prepare for a 'national day of action' next Thursday (17 October).

The background to this discontent is to be found in the painful adaptation of the French economy and Gallic society to the realities of the European Union.

Trimming the budget deficit to fit with convergence criteria and putting the public sector on a drastic diet will result in a huge social bill that Prime Minister Alain Juppé's conservative government might find hard to pay.

Clumsiness does not make it any easier. Juppé himself talked a few weeks ago of “trimming the fat” from the public sector.

That did not go down well with the rank and file, with unemployment reaching a record 12.8&percent; (3 million people) of the workforce.

The government's official launch of a 'national debate on Europe' next week thus appears very untimely.

But Juppé put forward the idea last May and it would now be very difficult to backtrack on such a large-scale project.

In each of the 100 or so départements and the 22 regions, prefects (representing the central government) will form debate committees charged with gathering the thoughts and feelings of their constituents.

After formally launching the debate process in Strasbourg on Tuesday (15 October), European Affairs Minister Michel Barnier will embark on a Tour de France to explain the latest developments in the Union.

The whole thing is to end on 9 May next year (which only die-hard Eurocrats remember is Schuman Day), when three representatives of the regional debate committees will present Juppé with the outcome of the nationwide cogitation.

Much of the cost of this exercise is to be met by the European Commission.

But Barnier's magical mystery tour may get bogged down only two days after it takes off, when millions of public sector employees go on strike, joined by more than 100,000 doctors from the private sector angered by recent limitations on the fees their patients are allowed to claim back from the national health service.

The fact that the private and public sectors are joining forces is a very bad omen for Juppé and President Jacques Chirac. Last year's strike soon became very unpopular with a population fed up with being stuck in unstaffed rail and tube stations and deprived of mail.

In September, Juppé tried to brighten the picture with fiscal reforms aimed at substantially reducing the income tax burden - already one of the lowest in the Union.

But he said nothing about lowering value added tax or the direct contributions on wages which represent the bulk of taxation in France.

The French government is nonetheless proud of having a 1997 budget that is on line with the Maastricht criteria.

The budget deficit will be under the crucial limit of 3&percent; of gross domestic product, with inflation, interest rates and national debt already below the levels set for joining the single currency.

The deficit reduction has been achieved by a masterpiece of creative accounting involving the pension fund at France Télécom, the soon-to-be privatised telecommunications operator.

As a result, at least temporarily, France could be the only EU member state apart from Luxembourg to comply to the letter with all the criteria.

But this is small relief when recent statistics show that if the overall number of people under the poverty line has remained roughly the same over the past ten years at 10&percent;, the share of people under 30 with a yearly income of less than 6,000 ecu jumped from 9&percent; to 18&percent; during the same period, and 40&percent; of the poor in France are now under the age of 40.

Another looming battle on the EU front for Juppé and Chirac is the liberalisation of railways and postal services as envisaged by the Commission and a majority of other member states.

Chirac stated publicly last week that France would never accept the opening up of postal services to competition on the basis proposed by the Commission, and Transport Minister Bernard Pons said the same last Friday about the railways.

Undoubtedly, these out- spoken statements were above all targeted at public workers gearing up for the strike.