French strikes intensify as government holds firm on labour law

A protester holds up his fist as riot police prepare to intervene during a protest against the French government's proposed labour reforms.
A protester holds up his fist as riot police prepare to intervene during a protest against the French government's proposed labour reforms. PHOTO: AFP

PARIS (BLOOMBERG) - Strikes at French refineries and railroads are set to intensify on Thursday (May 26) as the government said it won't back down on a labour law and businesses warned of economic damage if the protests continued.

Six of France's eight refineries are on strike. The CGT union has called for electrical workers to walk off the job on Thursday - including at 19 nuclear plants - and the national railroad is entering its eighth week of protests.

"The CGT does not makes the law in this country," Prime Minister Manuel Valls said in parliament. "There will be no retreat on the law, no putting into question of article 2, which is the core of the law."

After earlier protests, President Francois Hollande's government in March watered down elements of the bill, such as scrapping limits on severance pay. But some unions, such as the CGT, want the rest of the law abandoned, above all the controversial article 2, which would allow companies to ignore sector labour accords and negotiate directly with employees.

UNIONS DIVIDED

The protests have split France's unions.

"The CFE-CGC denounces the taking of France hostage," the CFE-CGC, which represents white collar workers, said in a statement posted on its website. It said it "calls on union protesters who are blocking our country to lift their blockades and barricades."

The CFDT, France's largest union by membership - which grew out of Catholic labour movements - supports the labour law in its current watered down version.

The CGT, which grew out of the Communist Party, is the largest union in terms of votes received during elections for work representatives.

The third largest union, Force Ouvriere (FO), supports the CGT. "It's Valls' refusal to budge or to negotiate that's causing the conflict," FO leader Jean-Claude Mailly said in an interview with BFM television. "One must not confuse authority with authoritarianism."

DISRUPTIONS

The government said 20 per cent of the country's 12,200 gas stations were facing shortages, though some private applications that track gas stations estimated as many as 40 per cent were missing at least one type of fuel. France has used three days of emergency reserves out of 115 days worth of supply, according to Mr Alain Vidalies, the transport minister.

Electricite de France SA, France's largest power company, said it couldn't forecast the effect of Thursday's strike. The state railroad said that three out of four long-distance high- speed trains will run, as will two of three Paris-region suburban trains.

Orly airport said 15 per cent of flights will be canceled and delays are expected at Charles de Gaulle airport.

Paris transport workers are due to strike next week.

On June 14, a major union demonstration is planned in Paris. Eurotunnel service to London and Thalys trains to Brussels have so far been spared any disruptions.France's main business and agricultural organisations issued a joint statement on Wednesday saying that "the transport strikes and the difficulties in obtaining fuel are beginning to impact economic activity in this country. Some companies are having to slow their activity, the most fragile ones see their survival threatened."

The CGPME, which represents small and medium-sized companies, said that 58 per cent of its members are having trouble making deliveries and 47 per cent are having trouble getting supplied.