France is experiencing one of its biggest strikes in decades as public sector workers protest against changes to the pension system.
The main impact of the strike is being felt on the transport networks and schools. The French national rail company, SNCF, canceled 90% of its trains on Thursday; the Parisian metro closed 11 out of its 16 lines; and the Eurostar is operating with a reduced timetable. France’s education ministry expects 55% of its teaching staff to go on strike nationwide.
There are also about 250 official demonstrations scheduled across the country. According to the French newspaper, Le Monde, more than 180 000 people are taking to the streets in 30 different parts of France.
Many of the main train stations, which usually see big crowds early morning, were empty. Workers either decided to stay at home or use alternative ways of transport. The Eiffel Tower and the Orsay Museum — two of the biggest Parisian landmarks — were shut because of staff shortages, according to the French agency AFP.
Why are they striking?
Prior to his election in 2017, President Emmanuel Macron vowed to reform France’s pension system. He believes the current arrangement is unfair, complex and costly. According to OECD data, France’s retirement system is one of the most expensive in the world, costing the government 14% of the country’s GDP (gross domestic product).
Macron is now pushing for a single, points-based system. At the moment, there are 42 different pension plans that vary according to profession and region, meaning some workers are entitled to a full pension before the general minimum retirement age of 62. The new system would mean that pensioners that contributed the same amount would have equal rights.
Tomasz Michalski, professor of economics at HEC Paris business school, told CNBC Thursday that for every 10 euros that a worker earns in income, that person will get one point under the new system. “But how will these points be translated into benefits?,” Michalski wondered.
The full details of Macron’s reforms have not yet been officially put to Parliament. Thursday’s strike is pre-emptive action and does not have an end date, meaning it could last for some time. Philippe Martinez, leader of French trade union the CGT, told reporters that the strike will not end this evening.
Previous attempts to change the pension system have also been met with strong opposition from public sector workers. In 1995, President Jacques Chirac ended up caving into union demands after his pension reform plans faced weeks of demonstrations.
Who are the winners and losers?
However, not every worker is unhappy about the expected pension reform.
Michalski, who’s based in Paris, said that Macron’s base, those with high-paying jobs, and also people that enter and leave the workforce often will be the “winners” of a point-based system.
However, transport workers argue that the new system would mean they would have to work longer into old age or see their pension reduced.
It is yet unclear how Macron might react to the strike action. Public support seems to be behind the strikers rather than the government — one opinion poll predicted 69% of the public supported the demonstrations, according to the BBC.
However, Michalski from HEC business school said: “If you are working from home with your kids (because transport is limited and schools are closed), you will be angry.”
In a research note, Antonio Barroso, deputy director of the research firm Teneo, said: “Given Macron’s track-record, his strategy in the coming weeks is likely to be a combination of attrition with certain flexibility concerning the proposed policy changes.
“The government will most likely also continue to portray the demonstrations as an attempt by vested interests to preserve the inequalities created by the current pension system,” Barroso added.
About a year ago, France was embroiled in protests. The so-called “Yellow Vests” movement took to the streets to protest against planned diesel taxes — their demonstrations lasted for several months.