French unions test Sarkozy in pensions strike

PARIS (Reuters) - French trade unions secured a show of strength on Tuesday with strikes and massive street protests against unpopular pension reforms that President Nicolas Sarkozy says he is determined to implement.

As a large Paris march started, union leaders said that they had already mustered a nationwide turnout that topped a previous benchmark protest of 2 million people in June, tapping mounting unease over government austerity measures across Europe.

Government estimates also suggested higher participation, although police figures are always lower than the organisers'. The official estimate of June's turnout was 800,000.

Francois Chereque, leader of the large CFDT union, told RTL radio the government would be ill-advised to ignore what he called "the biggest turnout in recent years."

"After today it's in the government's hands, It they want things to get better they'd better come up with proposals (for changes to the reform)," he said.

Bernard Thibault, leader of the other major trade union confederation, the CGT, warned ministers: "If they don't respond and they don't pay heed, there will be a follow-up and nothing is ruled out at this stage."

Analysts said however that even if the unions achieved a huge turnout on Tuesday, it was unlikely they could turn the day of protest into a rolling strike movement capable of forcing the government to back down.

Opinion polls show two-thirds of voters think Sarkozy's plan to raise the retirement age to 62 from 60 and make people work longer for a pension is unfair and support the protest, but two-thirds also think the strikes will make no difference.

"Never in polling history have the French people been so convinced that there's a social injustice," said political analyst Roland Cayrol, from Paris' Sciences Po institute.

The conservative government says the reform is essential to balance pension accounts by 2018, reduce the public deficit and preserve France's top-notch AAA credit rating, which helps it to service a big debt as cheaply as possible in financial markets.

TRANSPORT HIT

The strikes cut rail services by 50 percent or more but international links were mostly unscathed. Urban underground train services were also hit, though somewhat less than feared.

Half-way through the day, a government statement said nearly a quarter of civil servants were on strike, compared to roughly 19 percent last June, it said.

Dozens of rallies began in mid-morning in provincial cities before an afternoon march started to snarl through Paris, where CGT leader Thibault told reporters: "We're way bigger than last June. That was our target and the government will not be able to pretend nothing happened today."

The labour unrest mirrors action in other European countries against austerity measures. Governments in Greece, Spain, Italy and Romania have so far faced down strikes to impose painful pay and public spending cuts. London's underground rail network was paralysed on Tuesday by a 24-hour strike against job cuts.

The French strikes mostly targeted the public sector but several hundred steel workers downed tools at an Arcelor Mittal plant in northeastern France to highlight how the reform might worsen the plight of people with particularly gruelling jobs.

"We work 365 days a year in extreme conditions. Dust and noise means we are wearing ourselves out and going beyond 60 years old will send us to a certain death," Edouard Martin, a CFDT union representative, told I-tele TV.

As Sarkozy faced what may be the biggest protests since he won office in 2007, ministers said the pension bill's key principles were non-negotiable but signalled concessions on secondary issues such as earlier retirement for those with physically exhausting jobs or who began work at an early age.

Most major European countries have an official retirement age of 65, and some, such as Germany and Britain, plan to raise it gradually to 67 or beyond. But the real effective retirement age in France is similar to that of its neighbours, according to the Organisation for Economic Cooperation and Development.

MINOR CONCESSIONS POSSIBLE

With Sarkozy's approval ratings close to all-time lows, the president's two top advisers hinted on Sunday he may amend a widely-criticised "tax shield," enacted to ensure the wealthy do not pay more than 50 percent of their income to the state.

While the protesters marched, Labour Minister Eric Woerth, battered by a scandal over alleged conflicts of interest and illegal political donations, was to introduce the pension reform in parliament, which is due to adopt the bill next month.

Sarkozy has stood by Woerth despite a string of disclosures about his links with France's richest woman, L'Oreal heiress Liliane Bettencourt, and her wealth manager, Patrice de Maistre. The minister has denied wrongdoing and refused to resign.

However, the scandal has weakened his position and helped drive protests against the pension bill, seen as Sarkozy's flagship reform as 2012 elections loom larger.

France has a tradition of militancy although only about 10 percent of workers are unionised, mostly in the public sector. A 1995 revolt forced former President Jacques Chirac to abandon planned pension and healthcare reforms, and 2006 student protests killed plans for a low-wage youth employment contract.

But the mood is different now, with many people accepting that longer life expectancy and weaker public finances make a raising of the retirement age inevitable.

"Unlike 1995, when similar numbers took to the streets, there isn't the feeling (this time) that they can win something out of it," said Sciences Po analyst Cayrol.

(additional reporting by Elizabeth Pineau, John Irish, Vicky Buffery, Thierry Leveque and Gerard Bon, editing by Ralph Boulton)

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