Behind the strife, Hollande grinds out French reforms

[PARIS] Behind the headlines and images portraying a government unable to reconcile warring bosses and trade unions, economic reforms are slowly taking hold in France.

Socialist President Francois Hollande on Monday opened a workers-and-bosses conference aimed at producing a consensus on social policy.

It got under way in the shadow of a boycott by France's biggest union, the militant CGT, just two weeks after workers tore the shirt off an Air France manager in a dispute over job cuts.

Yet with a pension reform victory freshly under his belt, and some prospect that the steps he has already taken will show up in growth figures, Hollande has some reason to hope that his approval rating can rise from its current lowly 20 per cent.

Employer and employee negotiators agreed in principle on Friday to effectively extend the retirement age for about 18 million private sector workers by a year, a deal hailed as historic by the employers' group Medef.

Workers will in future have to pay in for an extra year to qualify for all of the contributory part of their pensions, raising their likely earliest retirement age to 63 from 62.

The dealmakers said the agreement raising the minimum contribution period to just over 42 years would save some 6.1 billion euros (US$6.9 billion) in the years up to 2020 - the bulk of an estimated 8.4 billion euro funding shortfall faced by France's two pension funds, Agirc and Arrco, which are run by committees of employers and employees. "This agreement shows that social dialogue in France is not dead. It augurs well for the future reform of labour law," said Frederic Andres of Euler Hermes.

Shops around France are gearing up for more Sunday opening, and bus operators are preparing to compete with the rail monopoly - two flagship measures from labour reforms that were finalised in parliament earlier this year.

As long ago as 2013, Hollande's government was able to get unions to back a degree of flexibility in 35-hour working week rules, under which employers could vary hours according to their need.

The CGT union is still holding out against the changes, workers are still capable of thwarting bosses' plans, as the Air France dispute shows, and the pace of change is likely to slow as Hollande seeks to keep left-wing voters on board for the 2017 presidential election.

But while still the largest by membership at 27 per cent, the CGT has slipped down the union rankings in recent years.

A more moderate grouping of unions, led by the CFDT, now represents over 50 per cent of France's 1.8 million union members, making reforms that bit easier to agree.

Further changes to France's famously pro-worker labour laws are planned: Prime Minister Manuel Valls told the conference on Monday that an outline would be given on Oct 28.

Yet growth strong enough to bring down unemployment from over 10 per cent remains elusive, Hollande acknowledged in a radio interview, begging the electorate to be patient. "All the reforms I am leading, all the actions I undertake, they are for growth, for jobs, and for the preparation of the future," he said.

Hollande was quick to point out that his careful and inclusive negotiations were working, denouncing the "brutality"on show at Air France earlier this month and the more combative style of his main political foe, Nicolas Sarkozy.

Last week on a shipyard visit, a worker wearing a CGT badge on his hard hat declined to shake Hollande's hand, and proceeded to attack his policies. Hollande stood his ground and listened.

In a similar incident at an agricultural show in 2008, the then President Sarkozy brushed an opponent aside, saying "get lost, jerk" - a rebuke that was picked up clearly by the surrounding press microphones. "Should I have uttered a certain phrase, you know, one that would have been seen as vulgar and rude?" Hollande asked his interviewer on Monday. "Certainly not."

REUTERS