Class War in France?
SARKOZY WARNED OF ‘CLASS WAR’
France faces a “class war” that could undermine President Nicolas Sarkozy’s reform efforts and spark a period of damaging labour unrest, one of the country’s most prominent business leaders has warned. In an interview with the Financial Times as France braced for its second national strike in less than two months, Maurice Lévy, head of Publicis said “people are really angry” over the country’s growing economic hardship and costly bank rescues.
Mr Lévy criticised the government for fanning the discontent. The boss of the advertising group said ministers had failed to explain adequately why the state had bailed out banks while refusing to help consumers with new tax breaks or wage rises.
Unions have promised another record turnout for Thursday’s general strike, with more protests planned across the country than in January when up to 2.5m people came out on to the streets.
The public mood has worsened, with protests becoming militant amid factory closures and as the government struggles to revive the economy.
“No one understood that the vast majority [of bank support] was in guarantees and in reality the money was not yet spent. People were told the country was bankrupt and suddenly there was €340bn available for these greedy people. On top of that they are distributing bonuses. We have another class war,” said Mr Lévy.
Claude Bébéar, the honorary chairman of insurance group Axa and seen as the elder statesman of French capitalism, warned in a separate FT interview that the country risked becoming engaged in “a struggle, with each side seeking to take advantage of the other to strengthen its position”. He urged the government, unions and employers “to play a collective game”.
Many business leaders fear that, as militancy grows, the government will make concessions on its reform programme. Mr Sarkozy has already backed down in a long-running dispute with academics and students over university reform. Medef, the employers’ group, is worried that concessions made after the January strike could impose new constraints on companies.
Mr Lévy said further compromises could encourage more protests. “Each compromise, even if reasonable, is misinterpreted as a grand victory by the strikers and the opposition,” he said.
“We have always known that reform has to be done very, very quickly. If it is not done quickly it ends in conflict,” he said.
WORKERS PILE PRESSURE ON SARKOZY
By Ben Hall in Compiègne
Published: March 18 2009
After being pelted with eggs by workers blockading Continental’s tyre factory on the banks of the river Oise, managers have been spotted sneaking in the back entrance by boat.
“People are distraught,” says Christian Lahargue, a Conti worker facing redundancy. “We’ll go all the way to keep this factory open.”
This aggressive stand-off in northern France on the eve of a national strike suggests social tension is rising and adding to the impression that a once sure-footed Nicolas Sarkozy, the president, is losing his touch.
The eurozone’s second-largest economy faces widespread disruption on Thursday when unions stage a national strike and hundreds of demonstrations in protest at Mr Sarkozy’s economic policy and reform programme.
Union leaders have vowed to beat the turnout of the last strike in January, when between 1m and 2.5m people took to the streets.
The scale of the protests seven weeks ago took the government by surprise, forcing it to come forward with €2.6bn ($3.38bn, £2.4bn) in extra welfare payments and tax cuts for low income families. But the concessions did not satisfy the unions nor impress the public.
According to an Ifop opinion poll for Paris-Match magazine, 78 per cent of French people consider Thursday’s strike to be justified. The French “have given licence to the union movement to articulate their opposition towards Nicolas Sarkozy,” says Stéphane Rozès, chief executive of pollsters CSA. According to another poll, the French think Olivier Besancenot, the Troskyist leader of the extreme left, is as “credible” as the president.
Since the beginning of the year, Mr Sarkozy has been on the back foot as economic gloom has thickened. The government was slow to react to a six-week general strike and unrest in Guadeloupe, its Caribbean island territory.
The president has run into opposition from within his centre-right party on a range of matters, from France’s return to the Nato military command to tax breaks for the rich.
Mr Sarkozy was forced to backtrack on university reform, one of his flagship modernisation measures, amid fears that a student protest movement led by the far left could turn violent. The concession has worried some business leaders. “The most radical are getting results,” says Maurice Lévy, chief executive of Publicis, the advertising group.
Mr Sarkozy has reason to feel aggrieved. The French economy is expected to fare better than its neighbours after Mr Sarkozy rapidly implemented a bank rescue plan, loan guarantees for small business, government-backed trade credit insurance and other measures to keep credit flowing to the economy.
He mobilised France’s once-scorned interventionist state and caught the public mood with his criticism of financial capitalism.
But at the same time as celebrating the return of the state, Mr Sarkozy is sticking to his goals of cutting taxes, slimming down government bureaucracy and curbing spending.
This is why French people believe that Mr Sarkozy’s policies are “neither coherent, effective nor fair”, Mr Rozès says. The French feel that banks are bailed out with few strings attached, but there is little government help for ordinary families.
Opposition to Mr Sarkozy is likely to focus on tax breaks for the wealthy, the so-called shield limiting an individual’s tax liability to 50 per cent of income.
Unions and some in the president’s own party want to scrap it. Mr Sarkozy refuses, reinforcing his unfortunate image as a friend of the rich.
It is far from clear that social tension will coalesce into a coherent political movement capable of paralysing Mr Sarkozy’s government.
“He is not in a downward spiral,” says Zaki Laidi, of Sciences Po university, who points to the disarray among the opposition socialists and says public and union criticism of the president is very diffuse. “We are not on the verge of a general strike.”
But other observers fear the possibility of unrest. “The real question for everyone is to know how public opinion will evolve,” says Mr Lévy. “Will people really believe … that with the global economy in such difficulty that they will decide to be calm and reasonable and decide to work together to get through it? Or will this drive people to desperate acts?
“My feeling is that we are not there yet but we could find ourselves in a situation with seeds of a very profound discontent and in a negative spiral that could lead to repeated strikes. This would force the government to give in.”