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French Senate Passes Pension Cuts To Raise Retirement Age

ELAINE GANLEY and ALEXIS DUCLOS   10/23/10 12:29 AM ET   AP

France Retirement Strikes

PARIS — Under pressure from the government, the French Senate voted Friday to raise the retirement age from 60 to 62, a victory for President Nicolas Sarkozy after days of street rage, acrimonious debate and strikes that dried up the supply of gasoline across the country.

The vote all but sealed passage of the highly unpopular measure, but it was unlikely to end the increasingly radicalized protests. The coming days promised more work stoppages and demonstrations by those who feel changing the retirement age threatens a French birthright.

Sarkozy made overhauling the money-losing pension system a centerpiece of his project to modernize France. Undaunted by weeks of strikes, he ordered measures to unblock fuel depots and refineries to get gas flowing again to desperate motorists.

"History (will remember) who spoke the truth," Sarkozy declared during a visit Friday to a factory in central France. "What do you expect of a president? That he tells the truth and does what must be done."

With about a quarter of gas stations on empty – down from a third earlier in the week – motorists have been forced to reinvent their lives, particularly at the start of a school vacation period Saturday.

Hours before Friday's vote, riot police forced the reopening of a strategic refinery to help halt crippling fuel shortages.

The impact on the crucial energy sector was an ominous specter for whole sectors of the economy. Employment Minister Laurent Wauquiez said this week that 1,500 jobs have been lost daily since the strikes began in earnest on Oct. 12.

Friday's vote came after some 140 hours of debate, with senators casting ballots by hand into a large green urn, approving the bill 177-153. The measure is expected to win final approval by both houses of parliament next week.

Sarkozy's conservative government cut short the debate via a constitutional article that accelerates the process – and gives the government final word on which of more than 1,000 amendments will get into the bill. He accused strikers of holding the French and their economy "hostage."

Speaking before the Senate vote, Labor Minister Eric Woerth said the day will come when opponents of the change "will be grateful to the president, to the government and the parliamentary majority for having had the courage to fully assume their responsibilities."

Leftist critics called the move a denial of democracy by an increasingly confrontational president.

"No, you haven't finished with retirement. You haven't finished with the French," said Socialist Sen. Jean-Pierre Bel, alluding to an apparently unflagging determination by unions, now joined by students, to keep protests alive – even through the upcoming week of school holidays.

Students planned to block schools Tuesday, and unions scheduled strikes and protests for Thursday and again Nov. 6.

Sarkozy says overhauling the pension system is vital to ensuring benefits for future generations. Many European governments are making similar choices as populations live longer and government debts soar.

But French unions say the minimum retirement age of 60, in place since 1982, is a hard-earned right and maintain the working class will be unfairly punished. Many fear it is also a first step to dismantling an entire network of benefits, including long vacations and state-subsidized health care, that make France an enviable place to work and live.

Guy Fischer, a Communist senator, denounced the pension overhaul as "brutal, unjust and inefficient." Like other critics, he said that under the proposal, 85 percent of costs are paid by workers, leaving companies off the hook.

The legislation phases in the new system, with retirement at 62 in force in 2018. It also raises the age for retirement with full benefits from 65 to 67.

Hours before the Senate vote, helmeted riot police in body armor shoved striking workers aside to force open the gates of the Total SA refinery at Grandpuits, east of Paris, one of four refineries in the Paris region. A bastion of resistance, Grandpuits had been shut down for nine days – one of the nations' 12 refineries on strike.

"The strikers have opened the valves," said Franck Monchon, a delegate of the hard-line CGT union. Protesters symbolically burned a coffin after the police intervention.

Despite the government's efforts to conquer union resistance, Prime Minister Francois Fillon said it would take several days to end gasoline shortages.

The government began unblocking fuel depots days ago and is allowing tanker trucks on the road on Sunday, when they are normally forbidden. It has ordered oil companies to pool fuel to ensure gas stations are stocked.

The prime minister convened oil industry executives Friday to review the country's lagging fuel supplies.

The head of the national petroleum industry body, Jean-Louis Schilansky, says it is struggling to import fuel to make up for the shortfall, because strikers are also blockading two key oil terminals, in Le Havre and Marseille. Dozens of tankers remained anchored in the waters off Marseille, unable to unload.

"The problem isn't so much finding the oil; it is getting it in to the country," he said. "If the depots and refineries remain blocked, we will not make it."

Nevertheless, Schilansky insisted that France has weeks or months of fuel reserves.

Marc Touati, head economist for Global Equities, was somber about the consequences of prolonged protests by the fuel sector, saying such a scenario could wipe out between 0.1 and 0.2 percentage points of economic growth. The government predicts economic growth of 2 percent next year, after 1.5 percent in 2010.

Violence around student protests have added a new dimension to the volatile mix.

"It is not troublemakers who will have the last word in a democracy," Sarkozy told workers at a factory in the Eure-et-Loir region, promising to find and punish rioters. "If we stop companies like you from working, who will pay?"

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Duclos reported from Grandpuits. Associated Press writers Angela Charlton and Greg Keller and AP Television News reporters Jonathan Shenfield in Lyon and Oleg Cetinic in Paris contributed to this report.

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Filed by Jeff Muskus  |