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EU: 'Aux Barricades!' Pension Reform Stirs Passions (Part 1)

  • Breffni O'Rourke

Nationwide strikes halted many planes, trains, and buses in France today and hit schools, hospitals and other services as trade unions mobilized a major protest against planned pension reforms. Demonstrations on the same subject also occurred in Austria today. Why are passions being stirred on this usually dry topic? RFE/RL examines the issues in the first of a two-part report.

Prague, 13 May 2003 (RFE/RL) -- The great rallying cry of the revolution of 1848 in France was "Aux barricades!" -- meaning workers should go out and block the streets against the government and its troops.

Almost the same fervor seems to be afflicting France today. The country has been crippled by strikes in a wide range of transport and other public services. The reason? The government is trying to reform the pensions system.

In France, today is being called "Black Tuesday." "Solidarity over pension funds!" yelled crowds in Paris. "It's good to finance retirement funds and pensions." Can such a seemingly dry issue mobilize modern workers to metaphorically man the barricades?

Humorous as the idea is -- that trembling graybeards will be ripping up paving stones for ammunition -- the situation is deadly serious and has the potential to bring down the center-right government of Prime Minister Jean-Pierre Raffarin. It has happened before. In 1995, massive protests over pension reform helped drive the government of conservative Prime Minister Alain Juppe from power.

The same threat exists in Austria, where demonstrations are also being held today to protest pension reform. In that country, the president has felt compelled to intervene to cool passions between the government and opponents of the reforms.

Despite the furor in France, Raffarin's proposals would only modify the present pensions system, not destroy it. The basic feature of the system is that those who work pay contributions that finance the pensions of those in retirement.

However, demographics play a key role. Raffarin points out in an open letter to the French public that while, in 1960, four workers paid for every pension, by the year 2020 that ratio will be one-to-one because of the aging of the population. Raffarin says that, without reform, pensions will have to be cut by 50 percent.

To counter this, an extra $57 billion is needed. The French government plans to raise this money by making public-sector employees -- who make up one-quarter of the country's labor force -- work for 2 1/2 more years in order to qualify for a full pension. The private sector would be brought up to the same level.

As London-based analyst Katynka Barysch of the Center for European Reform put it, the French government is taking the easiest and most direct course. She described extending working years as an "easy, quick, and cheap fix," recalling that when the German Chancellor Otto von Bismarck pioneered a pension system in the 19th century, the retirement age was 60. At that time, she noted, average life expectancy was also 60.

"So people were not getting much in terms of a pension. Now, the official retirement age in most countries is 62 to 63. People generally retire early, particularly in the French and German public sectors, but they live until they are 80, and clearly this is not sustainable," Barysch said.

The powerful French labor unions, however, are putting up a fight. Francois Chereque, a leader of the National Confederation for Democracy and Labor, said the government must beware.

"If they are not understanding our action, and if they are not hearing the words of the people today, there will be a huge conflict, and we will never manage to get to an agreement. So if the government wishes to implement reforms that will be accepted by the employees, it will have to accept the negotiation planned for tomorrow and realize that today there are a lot of unsatisfied people," Chereque said.

In Austria, the pension question has already led to the biggest strike in 50 years, and more demonstrations are taking place. The National Federation of Austrian Unions says it will rally 200,000 people in central Vienna later today to protest reforms.

Chancellor Wolfgang Schuessel's conservative People's Party (VP) wants reforms pushed through parliament in three weeks, but it is dependent for a majority on its coalition partner, the right-wing Freedom Party (FP). Support from the FP is not yet certain.

In addition, Austrian President Thomas Klestil has taken the unusual step of intervening. Klestil said the pension reforms would create "unacceptable" cases of hardship and is calling for a three-month postponement so that all sides -- including trade unions -- can express their views.

Schuessel, however, is rejecting any delay in the reforms, which are similar to those in France, setting the stage, it would seem, for further tumult.

(In Part 2, we look at the reasons for the public's resistance to changes in pensions.)