|President Nicolas Sarkozy succeeds in breaking the strike against the abolition of special pension privileges.|
A demonstration in Paris on November 14, the day unions launched a nationwide strike against the government’s reform plans
A SMALL fire has been lit near one of the railway yards at the Gare de Lyon station and over a hundred railway workers, most of them signalmen and engine drivers wearing heavy parkas, huddle around it for warmth. It is 6 a.m. and very cold. A microphone has been set up near by and soon the meeting is called to order. It is the eighth day of the massive strike that brought France to a grinding halt and the morale is low.
The end has come, a little too soon for some, and it is time to throw in the towel. Sylvain, a diminutive man wearing spectacles and sporting a goatee, says it all: “We’ve lost. This is surrender, pure and simple. We have been sold down the drain by the leadership and we’ve given in. But workers from other sectors who have not joined us will realise too late what all this was about when the number of years one has to work will go up to 42 and beyond.”
There is a show of hands. Almost unanimously they agree to go back to work. Faces are drawn and unhappy. The past week has been rough on their nerves and their pockets. Nicolas Sarkozy, France’s iron-fisted new President, has succeeded in breaking the backs of the unions.
Several other workers take the mike to express sentiments of disappointment, even sorrow. There is a real feeling of loss here, of despair and humiliation. “We have submitted, but only for the moment. If negotiations do not go our way, we still have December to show them we can bring the country to a halt again.”
However, unlike in 1995 when France remained gridlocked for over three weeks bringing the economy to a near-total halt, public support for the strike has waned. There is across-the-board agreement that special pension privileges must become a thing of the past. There is a new understanding about the urgency of introducing changes in welfare schemes such as the securite sociale, or generalised public health care system, pensions and unemployment benefits.
With an ageing population, high life expectancy and a low birth rate combined with soaring labour costs in the face of global competition from China, India and other emerging markets, France, like most European nations, finds it hard to keep up its opulent lifestyle and dole out massive pension and welfare benefits.
So what was the recent work stoppage all about?
The strike, whose visible face was railwaymen, was also staged by other categories of workers who enjoy special pension benefits, such as early retirement. Railway drivers can retire at age 50 while miners, merchant seamen, fishermen and others can retire at 55. Known as regimes speciaux, these were instituted to compensate certain types of workers for difficult working conditions and have been in existence for several years. Some, like the special privileges accorded to ballet dancers and opera singers, have been around for over 300 years.
The government plans to bring these special regimes in line with the rest of the workforce. It also plans to increase the number of years a person must contribute to the pension fund in order to receive a full pension. Currently it is 40 years of work. The government hopes to extend that period to 42 years.
The law that allows rail locomotive drivers to retire at the age of 50 was passed in 1855 at a time when shovelling coal into steam engines caused severe respiratory illnesses and drastically reduced their life expectancy. At the Paris Opera, for instance, where some pockets of resistance continue, ballet dancers can retire at the age of 40, members of the choir at 50 and technicians at 55.
President Nicolas Sarkozy appears to have won round one
“The contract with the members of the Opera was signed in 1698, under Louis XIV, the Sun King. It is almost sacred because of its age and its far-sightedness. This government cannot abrogate on a whim a law based on sound principles. Ballet dancers are often worn out after 40. With the advance of age it is impossible to execute the pirouettes, throws and other complex steps with the same speed and precision as when you are young and at the peak of your physical prowess, which is why a dancer should retire at 40. There is no favouritism; we are not being given special treatment. It is the nature of the work. And ballet dancers work between ten and twelve hours a day during their working life,” says Sylviane, a dancer who started at the Paris Opera at the age of six as a “rat” – a term signifying gifted dancers recruited at a very young age.
There are in all some 15 “special” categories, including merchant seamen and fishermen (since 1709), workers at the French Central Bank (1806), civil servants (1853), miners (1894) or actors at the state theatre, Comedie-Francaise. Surprisingly, senators and parliamentarians also enjoy such special privileges; their pensions are, however, not being immediately touched by the reforms proposed by Sarkozy.
In all, these special pensions concern 1.6 million workers of whom 1.1 million are pensioners while the remaining half a million are still active, contributing to the pension fund. Representing 6 per cent of all pensions paid out each year, they run up a shortfall of five billion euros annually since the number of pensioners is double that of the contributors. The state makes up this shortfall each year.
The government argues that working conditions have improved significantly and that these special schemes are no longer warranted. Railway workers have taken the brunt of the criticism since engine drivers no longer shovel coal and die prematurely of tuberculosis but drive electronically operated locomotives that can run at a speed of 300 kilometres an hour.
Says Martine Durand of the Paris-based Organisation for Economic Cooperation and Development: “France is facing rapid population ageing because of low fertility and longer life expectancy. This means the dependency ratio of older people – those aged 65 and above as a proportion of those aged 20-64 – will rise from 25 per cent at present to 50 per cent by 2050. In other words, there will be more elderly people but fewer people of working age to support them.”
These demographic trends, she says, are putting tremendous pressure on the French pension system, which is based on Pay-As-You-Go (PAYG) distributive principle; people who are currently working pay the pensions of those in retirement. Everybody agrees that reform is necessary; if nothing is done soon, public deficits could rise by some 5 per cent of the gross domestic product (GDP) over the next 30 years. And public debt could more than double. So, without reform now, the children and grandchildren of today’s workers will pay the price, she warns.
There are two ways, Martine Durand explains, to put the PAYG system on a sounder financial footing. The first is to increase total contributions; the second is to reduce pensions. Virtually no one in France favours cuts, so the government is left with raising contributions. This in turn can be achieved in two ways: by increasing the number of people at work or by raising the rate of contributions currently levied on labour, and perhaps taxes on capital, too.
Commuters waiting at Gare de l’Est subway station in Paris on November 22
The Sarkozy government has chosen to adopt the first method. The most urgent step, according to conservative economists, is to eliminate progressively provisions that subsidise early withdrawal from active life – first and foremost, early retirement schemes. Too often in the past, they say, these schemes have been used to make people redundant, while at the same time helping to reduce unemployment figures.
But workers disagree, saying their wages are extremely low and that they will stand to lose under the new pension schemes. “Granted we do not shovel coal any more and granted that we have job security when compared with the private sector. But our salaries are much lower, we pay a higher percentage of pension contributions compared with the private sector and we work odd hours, day or night, on call on holidays and weekends. Plus we are responsible for the security of as many as 600 passengers at a time. So the painful aspect of our work has not disappeared. This should be taken into account. The government is hoodwinking us. Sarkozy and his ultra-liberal cronies are pushing us towards a system where we shall be obliged to take out pension policies and contribute to private pension funds so that his friends at the insurance companies get fatter and he with them,” says rail worker Pascal Escoude.
“Sarkozy wants to impose a reform that would cut the pensions of workers in special regimes by a quarter – without redressing the inequalities of the retirement system. The method: an iron hand in a velvet glove. Nicolas Sarkozy says there are many things to discuss. Many things but not the most essential because the government declared in advance that the most vital points of its pension reform project, that is, the special regimes, were ‘non-negotiable’,” wrote the Communist daily l’Humanite.