Waiting For The Sport In Paris

"There could be sport - and not just in the rugby stadiums," said Bernard Thibault, the leader of France’s powerful communist-leaning CGT union, sending an alarm note to President Nicolas Sarkozy, who announced pension reforms last week. This sentence gives indication about the tough time lies ahead of the reform-minded president. Thibault’s warning could not be played down in a country like France where the unionized workforce could even bring down the government in the past in order to save the social security system. The showdown between the trade unions and the conservative President, Sarkozy hit a new high as the latter announced that he would bring an end to the so-called “special regimes” which offer retirement privileges for state workers. The “special regimes” that date back to the Second World War ensure special retirement privileges for certain state workers including bus and train drivers, miners, merchant sailors. According to the president, it’s the highest liability of the French state these days to sustain the costly social security policies. Promising to “modernize” France’s economic sector and to meet the European Union deadline of 2012 to balance the budget, Sarkozy sends out a tough message to the highly organized French workforce.

Given the history of French unionism, Sarkozy is out to play a risky game. Touching the holy cow of French revolution, the welfare state, has never been an easy task for any leader in France. Whenever the previous governments tried to axe the Special Regimes, they had been badly beaten by the workers. In 1995, workers paralysed the whole country and brought down the first government of Jacques Chirac when he tried to reform the pension scheme. The Socialists who suffered a setback in the last presidential elections have already upped the ante accusing Sarkozy of suffering from "small man syndrome". Referring to president’s reform plan, Benoît Hamon, a Socialist spokesman, said, "In psychoanalysis, this is what you call the syndrome of the small man who considers that everything he does is bigger than anything that has ever happened.

With Nicolas Sarkozy, all he does, all he touches, he considers it to be the greatest. In reality, we have never witnessed such a step backwards since the liberation - on the social issue, as well as on immigration."

So, the writing on the wall is clear. If Sarkozy is serious in bringing in reforms, he would have to strike a deal with the workers. If not, he should be prepared to face the ire of the most powerful workforce in the continent.

(Published on Business and Economy on 6 September 2007)