Bloomberg News

Hollande Government Faces Public-Sector Protest on Wages

January 31, 2013

French President Francois Hollande faced the first protest by public-sector workers after three of the country’s unions called for the nation’s 5.2 million government employees to take to the streets.

Unions are seeking a show of force ahead of wage negotiations with the Socialist government on Feb. 7. About 120 demonstrations today across France disrupted schools, hospitals and other public services, unions said.

“From the previous government to now, not much has changed,” Thierry Lepaon, the head of the CGT union, said in an interview on RTL radio today. “A protest of this scale has been called for the first time to focus the government’s attention on employment, wages and purchasing power.”

The move by Hollande’s political power base show the challenges he faces in addressing spiraling unemployment as France teeters on the brink of recession. Earlier this week unions representing workers at companies including Arcelor Mittal (MT), Credit Agricole SA (ACA), Faurecia SA, PSA Peugeot Citroen (UG), Sanofi, Valeo SA (FR) and others demonstrated in front of the labor ministry against thousands of job cuts, leaving the country with jobless claims at the highest in 15 years.

“Not a week passes when there isn’t a massive firing by a company that is making enormous profits,” the unions said in their statement to Labor Minister Michel Sapin.

They called on Hollande to keep his campaign promise to block job cuts, reminding him that their support helped him win the presidency.

Belt Tightening

Today’s demonstrations are aimed at getting the government to rework the index used as a base to determine salaries of public servants. The unions are also seeking a reiteration of Hollande’s goals to add jobs in the areas of education, security and justice.

“I understand their concerns after salaries were frozen for a third year,” Public Service Minister Marylise Lebranchu said in an interview on BFM TV. “At least we’ve stopped cutting public-service jobs as Nicolas Sarkozy did. Still, we have to be aware of the extremely difficult budgetary context we face.”

Hollande is working on shrinking the country’s budget deficit, bringing it down to 3 percent of gross domestic product this year from 4.5 percent last year. He has called on government departments to tighten their belts after pledging in November to cut public spending by 60 billion euros ($81 billion) over five years.

France’s economy is expected to have contracted in the fourth quarter of 2012 and the first three months of this year and is set to post no growth in 2013, according to Bloomberg surveys.

To contact the reporter on this story: Vidya Root in Paris at vroot@bloomberg.net

To contact the editor responsible for this story: Tim Quinson at tquinson@bloomberg.net


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