[A-List] France: privatisation protests

["Keaney Michael" <Michael.Keaney@xxxxxx>]

French workers protest at state sell-off scheme
By John Lichfield in Paris
The Independent, 04 October 2002

The spectre of a re-run of the damaging 1995 confrontation between
government and unions hung over France yesterday when 80,000 people
protested against the privatisation of state-owned industries and public
services.

Yesterday's action was heavily supported by employees in the state
electricity and gas companies but also by workers in Air France, the
railways and the postal service. It was intended as a warning to the
centre-right government of Jean-Pierre Raffarin, which is planning a
privatisation programme, partly to help to balance the French budget.
The demonstrations, especially those by railway workers, were also a
protest against European Union plans to open state monopolies to
competition.

About 60,000 people marched from the Place de la Nation in Paris and an
estimated 20,000 joined similar protests around the country.

The marches were a reminder for Mr Raffarin of the winter of 1995 when
strikes and demonstrations brought France to its knees and forced the
last centre-right government to abandon its plans for reform of the
state sector.

The comparison with 1995 may be unjustified. Seven years ago, the unions
were able to tap a deep well of public resentment against the austerity
policies of the government of Alain Juppé. The Raffarin government,
elected in June, remains broadly popular.

In any case, the privatisation programme is on hold for other reasons.
The collapse in world stock markets means that any sell-off of state
industries, or public stakes in companies, would resemble a cut-price
sale. Air France, for instance, which is 55.9 per cent owned by the
state, was valued at EUR4.2bn (£2.7bn) six months ago. Despite its
record as one of the few large airlines to be profitable, it is now
worth EUR1.7bn.

The postponing, or scaling down, of the privatisation programme will
have awkward implications for the country's deficit over the next few
years. The European Commission is considering warning Paris because its
tax and spending plans for 2003 threaten to break the guideline for
countries within the euro.

The government, committed to its election promise to cut taxes, may be
forced to take on the unions in a different way: by imposing cuts in
public spending and staffing. Yesterday's demonstrations may therefore
be a rehearsal for a confrontation next winter, rather than this one.