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Sarkozy’s ‘Thatcher moment’

The outcome of the strike movement sweeping France is being monitored closely by The Economist and other voices of the market economy. “Let battle commence”, they urged (15 November). “Can Nicolas Sarkozy be a French Margaret Thatcher?” asked Les Echos, a business newspaper. “Is Sarkozy ready for a long trial of strength with the unions à la Thatcher?” mused Le Parisien, in a reference to the class conflict that shook Britain between 1982 and 1986.

Sarkozy ThatcherPrevious French governments have lost their nerve in the face of strikes and demonstrations against plans to impose what is referred to as the Anglo-Saxon globalisation model by the country’s trade unions. This is viewed, correctly, as an economy based on flexible, low-cost labour, the unfettered movement of capital and a continuing reduction in social benefits and rights.

Will Nicholas Sarkozy stand firm, The Economist asks? It recalls with alarm the attempt in 1995 by the Chirac government to break up the country’s excellent public-sector pension schemes. Sarcastically, the magazine notes: “In the end, Jacques Chirac's government did what French governments do best: it backed down and dropped the whole plan.” It sees more hopeful signs this time, as Sarkozy confronts strikes by transport workers, civil servants, teachers and protests by students against plans to open universities to corporate investment.

Sarkozy wants to end what are known as “special regimes”. These allow railway, electricity and gas workers to retire on full pension after 37½ years of pension contributions, rather than 40 years in the rest of the public sector. Some 500,000 workers, and 1.1m pensioners, benefit from these regimes. Over the next four years, Sarkozy wants to lengthen the required contribution period to 40 years. The government also wants to extend to 41 years the required pension-contribution period for all workers, as well as introduce changes to the labour market and the benefit system.

The Economist is keeping its fingers crossed. By comparison with his predecessors, the magazine notes, Sarkozy has done exactly what he said he would do. And he has calculated that the leaders of the strike movement are looking for a compromise rather than building a momentum to bring down his government. The government has said it is prepared to talk about details in an effort to woo union leaders. The Economist is not completely convinced that France will enter the world of Anglo-Saxon globalisation, however, warning: “The deal he [Sarkozy] does on special regimes needs to be scrutinised to see how far he keeps his word.”

Nevertheless, the strike movement in France, along with industrial action by railway workers in Germany and nurses in Finland, indicate a rising tide of militancy just as the wheels come off the global economy. With the euro rising to new heights against the declining dollar, exports from the European Union become more expensive. This is what is driving the state and employers to reduce workers’ conditions. The events in France could presage a European-wide period more like the revolutionary year of 1968. Now that would really get The Economist worried!

Paul Feldman
AWTW communications editor
20 November 2007

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