France’s Thatcher? Not Exactly [Weekend Open Trackback]

French President Nicolas Sarkozy on Friday claimed victory in the 10-day labour dispute over a pension reform as the strike called to protest the proposal appeared to be ending. “I promised this reform, and I have kept my promise,” Sarkozy said during a speech at the Elysee Palace. The French Finance Ministry has estimated that the strike cost France’s economy up to 4 billion euros (about 6 billion dollars).

The reform, which apparently deprives about 500,000 workers in the railway and energy sectors of some pension privileges, “could not be
postponed any longer,” Sarkozy said, and paid tribute to travelers and commuters who, he said, were “taken hostage” by the striking
workers. However, France-Info reported that most of the railway workers who voted to return to work were talking about a “suspension” of the strike, rather than a definitive end.

The end of the strike has been hailed as a huge success of Sarkozy by two heavyweights in the blogosphere: Glenn Reynolds and David Frum: the former today wrote of France’s Thatcher, citing an enthusiastic article on The New York Sun talking about “a first success of Sarkozy”; the latter today compared France’s president stance in this conflict to the firing of the airline controllers by Ronald Reagan in 1981. We fear that Reynolds and Frum are making a mistake.

Why? Because the future of this labour conflict depends on the progress of negotiations over the reform, which involve union officials, government representatives and the management of the SNCF national railway network and the RATP urban transit system serving the greater Paris area. The talks began Wednesday and are scheduled to be resumed next week. It is uncertain if rank-and-file union members will accept having the number of years they must pay into the pension system increased from 37,5 to 40, a proposal the government has vowed not to withdraw. The SNCF (that is, the french government) has reportedly put forward an offer that would give workers affected by the reform a supplementary pension and wage hikes toward the end of their careers, measures that could cost up to 100 million euros per year.

Put shortly, Sarkozy wants to fight the retirement privileges of government workers simply by creating new privileges, with a kind of a barter: money for privileges. Now the point is: how many monetary savings will be obtained by increasing monetary retirement benefits for government workers?

Quite frankly, Mr. Reynolds and Mr. Frum: do you really think Sarkozy is managing the conflict exactly like Reagan and Thatcher did?

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