What's happening in Europe

 

Europe Trade Specialists 

 

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France is afflicted with discontent, but are unions strong enough
to keep the mood dark

 


FRENCH President Francois Hollande faces the most serious public unrest since he came to office four years ago. Whatever remedial action he devises, volcanic fissures erupt like molten lava destroying whatever peace his latest compromise has achieved.

We have seen the country's refineries on strike and fuel shortages spread throughout the land. Protesters have blockaded refineries and fuel depots, causing shortages and long lines at petrol stations. Air traffic controllers and electrical workers have joined in. And the turmoil has exacerbated a labour dispute already underway at the national railroad.

But keeping the mood of France dark and angry is becoming an increasingly difficult task for unions. Even though they still play a key role in negotiating labour contracts, unions have never been weaker. Only about eight per cent of French workers belong to one, compared with 11 per cent in the US and 18 per cent in Germany, according to the OECD. The CGT, which grew out of the French Communist Party, had four million members in 1948 and has 700,000 now.

So while the French have stoically gone on with their lives, some protests have turned violent: a police car was torched on the streets of Paris. Railway, transport workers and air traffic controllers laid out plans to strike with unions threatening to disrupt the 24-nation Euro 2016 soccer tournament.

While one is tempted to say, "Same old, same old - the French are always on strike" the situation today is fundamentally different in that a basic premise of the prevailing social contract that has governed and heavily regulated state is being challenged.

Not by greedy capitalists seeking less taxation and more profit or greedy socialists seeking more money for less work. The problem is with accountants who say neither can have their way because the numbers will not add up.

The ostensible cause of these disruptions, the most extensive since 2010, is a law easing the country's rigid labour rules. The standoff has undermined President Hollande, already the most unpopular president in French history, less than a year before the next presidential election.

A socialist, he came to office in 2012 with the support of unions, many of whose members now feel betrayed by his attempts to loosen labour protection. That is to say, allowing employers to get more work from employees for less money. Crunching the numbers, it is generally admitted, that whatever the punitive value in taxing the affluent, usually favoured by economically illiterate leftists, it is widely agreed that making the rich poorer does not make the poor richer - and certainly not for long.

Labour in France is governed by the "Code du Travail", that covers everything from bathroom breaks to the size of windows in office. Layoffs can take years and require expensive payouts. The 35-hour workweek, introduced in 2000 by a previous socialist government, has further complicated the rules.

French unemployment rate has been 10 per cent for three years, and the International Monetary Fund and the European Commission have urged a loosening of the rules. Germany did so in the mid-2000s and unemployment there is now 4.5 per cent. Even one-time laggards such as Spain and Italy are now outperforming France after liberalising their labour markets.

Parties from the left and the right, when they've governed the country, have acknowledged that France's labour laws are too rigid while shying away from major changes.

 

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