French pension bill passes, unions to battle on

French gendarmes charge to unblock the entrance of the Grandpuits oil refinery southeast of Paris October 22, 2010 as striking workers continue to block after police took over the Total installation, the CGT union said on Friday, in an attempt to end a blockade by workers striking over a planned reform of the pensions system. Police were expected to bring in workers who are not on strike later in the day. REUTERS/Benoit Tessier

PARIS, (Reuters) – The French Senate approved an  unpopular pension reform yesterday in a victory for President  Nicolas Sarkozy, although unions opposed to raising the  retirement age have vowed to keep fighting it.

Senators voted 177 in favour and 153 against the bill after  the conservative government used a special measure to speed up  the debate in the upper house, having had to send in police to  break up long-running blockades of fuel depots.

The law to make French people work two more years for their  pensions has been one of the most fiercely contested reforms  among austerity measures being taken across Europe.

The Senate approval means it should pass quickly into law  following signatures from a joint parliamentary council and a  constitutional council on the final text.

“It is not by hanging on symbols of the past that we will  remain a great nation,” Eric Woerth, the labour minister in  charge of pushing the reform, said in a speech to the Senate  shortly before the vote.

French gendarmes charge to unblock the entrance of the Grandpuits oil refinery southeast of Paris October 22, 2010 as striking workers continue to block after police took over the Total installation, the CGT union said on Friday, in an attempt to end a blockade by workers striking over a planned reform of the pensions system. Police were expected to bring in workers who are not on strike later in the day. REUTERS/Benoit Tessier

Earlier yesterday, police rushed picket lines near Paris to  break up a blockade of the main oil refinery supplying the  capital as unions hardened their stance with further strike  action in key sectors of Europe’s second-largest economy.

Signalling their determination to keep fighting the bill  after it becomes law, France’s six main unions have called for  two more days of protest action on Oct. 28 and Nov. 6.

“The protests are not stopping, we just have different views  on how to proceed,” Jean-Claude Mailly, head of the more radical  Force Ouvriere union told RMC radio. “We still think that  demonstrating is not enough … we have to ramp it up … we  need a strong day of public and private sector strikes.”

The government appeared equally determined.
Police in wielding riot shields cleared pickets and burning  tyres at dawn at Total’s Grandpuits oil refinery southeast of  Paris. Scuffles broke out at the plant and one person was  carried away on a stretcher after being trampled.

Analysts did not expect the strikes to have any lasting  impact on sentiment towards French debt. France comfortably sold  short-term paper on Thursday though it paid a premium from  previous issues on what analysts said may be fleeting concerns  over its ability to enforce austerity measures.

“The crisis to date has had next-to-no impact on bond  spreads in France,” said Julian Jessop, chief international  economist at Capital Economics. “I think there’s a perception in  the markets that this is just the French being French ….”

Sarkozy has been under pressure to end the long-running  impasse with the unions before half-term school holidays  beginning this weekend. His popularity ratings are near an  all-time low 18 months before a presidential election in which  he is widely expected to seek a second term.

In addition to transport disruption, Sarkozy is battling  11-day-old strikes at the country’s 12 oil refineries and fuel  depot blockades that Energy Minister Jean-Louis Borloo said  forced the closure of one in five petrol stations.

Jean-Louis Schilansky, head of oil sector lobby UFIP, told  reporters after meeting Prime Minister Francois Fillon that  there was enough fuel to last for several weeks or months by  increasing imports and pooling reserves.

“Sarkozy has declared war,” said Charles Foulard, leader of  the oil sector workers at the communist-led CGT union.
Sarkozy says the reform is the only way to limit ballooning  pension shortfalls and protect the coveted “AAA” credit rating  that allows France to borrow at favourable interest rates.

“If the French are not careful, they will soon join the  PIIGS (Portugal, Italy, Ireland, Greece, and Spain) as the  troubled economies of Europe,” said professor Anthony Sabino, at  St. John’s University in New York.

The government is aiming to cut the deficit to 6.0 percent  of gross domestic product next year based on an economic growth  forecast of 2 percent in the first phase of a plan to trim the  budget gap to the EU’s 3.0 percent limit by 2013.