New Europe May Debut in France

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The New York Sun

Whether what Defense Secretary Rumsfeld liked to call “Old Europe” is ready to embrace the free market in what President Bush envisions as a “New Europe” of free enterprise and opportunity will be put to the test this week when President Sarkozy of France proposes a two-pronged reform of his country’s extravagant working practices.

This afternoon, Mr. Sarkozy will announce radical changes to France’s retirement system for state employees, in which workers are allowed to end their working days early on munificent pensions. Tomorrow he will outline plans to reduce drastically the number of civil servants.

True to form, the French trade union leaders have already warned that they will meet all such attempts by the president with strikes and protests. François Chérèque, the leader of one of the five major union organizations, the French Democratic Labor Confederation, which represents 875,000 workers, has threatened a “major conflict” if Mr. Sarkozy attempts to press forward with reforms without consultations.

The president is aware that the last French leader who tried to reform the widespread system of workplace entitlements, Prime Minister Juppé, was rewarded in 1995 with a wave of strikes and violent street protests that crippled the country. The reforms were abandoned.

This time, Mr. Sarkozy appears to be hoping that France is ready to embrace change. He promised during the run-up to the presidential election that brought him to power in May that the overhaul of the economy and the abandonment of restrictive employment practices would be one of his highest priorities.

Four months later, he is set to start putting that mandate into action. “I was elected to put in place deep reforms to modernize France, and those reforms will be completed,” Mr. Sarkozy said on a recent trip to Germany. In a poll conducted in France this month, 68% said they favored reform of the special retirement schemes.

But it won’t be easy. French workers have long derided the “Anglo Saxon economy” of free and open markets, preferring Mr. Sarkozy faces a more serious set of problems even than Prime Minister Thatcher confronted when she tamed the powerful British trade unions in the early 1980s, and it is by no means clear whether he has the courage and determination to press on with reforms in the face of strident opposition, as she did during the bruising yearlong British coal miners’ strike of 1984–85.

The French system was largely installed in 1945, though some of the country’s most extravagant working practices are much older than that.

The guiding principle, to reward those who work in dangerous jobs with early retirement and a full pension, has long been an anachronism.

In the days of steam trains, when engine drivers shoveled coal into an open furnace as the locomotive sped along the tracks, engineers who worked for the nationalized railway, SNCF, were allowed to retire at 50. Now, although all trains are run on electricity or diesel, the drivers maintain their special status.

And such privileges extend to many other groups of state workers for whom there was never any danger, including civil servants in the Bank of France, members of the French national assembly, workers for the state gas company, GDF, coal miners, fishermen, employees of the nationalized electric company, and even those who work at the state-run national theater company, the Comedie Française.

In all, 1.6 million will be affected: half a million employed by the state and 1.1 million pensioners.

Mr. Sarkozy has said bringing an end to such special cases will save the French taxpayer $6 billion. “The truth is that there are special retirement regimes that don’t always correspond with difficult jobs, and there are difficult jobs that don’t correspond with special retirement regimes,” he said. “I’m going to change this situation because it is a disgrace.”

This week’s announcements are part of a broader raft of reforms by which the president aims to move France closer to the American economic model. Earlier this month, he bemoaned the system of unemployment benefits, which rewards those who do not look for work. The unemployment rate in France is 8%, higher than the European average, and Mr. Sarkozy is seeking to bring it down to 5% by liberalizing France’s protective labor laws.

He also has indicated that he would like to reform the European Union’s Common Agricultural Policy, which intervenes in the market to subsidize heavily France’s inefficient small farmers.

And last week, Mr. Sarkozy declared his intention to reintegrate France into NATO’s command structure, a reverse after 40 years of standing on the sidelines of the postwar mutual defense pact.

Such a move could herald a willingness to send French troops to Afghanistan, where NATO troops led by American and British forces are fighting the Taliban, who continue to harbor the terrorist leader Osama bin Laden.


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