State restructuring and trade union realignment: the pensions struggle in France.

In a previous 'Behind the News' article, Jeffreys (1996) provided a convincing analysis of the 1995 French strikes over pension reform, which he represented as the latest fight over 'acquired rights' enshrined in the 1944 constitutional settlement. The events of 1995, triggered by the political exclusion of labour from decision-making, marked the end of labour quiescence. Endorsing the main lines of Jeffreys' analysis, in this paper (1) we examine how the attempt, inspired by European Union (EU) institutions, to include labour politically in the reform process through 'concertation' (2) mechanisms, marks an important difference from 1995. We argue that this approach was disconcerting for trade unions, contributing as it did to division and defeat. Moreover, these events have contributed to a process of union realignment that has accelerated to a point where the distinction, established in 1995, between unions of accompaniment and unions of protest is being superseded by new strategic orientations around the alternative, opposed identifies of 'social partner' and 'social movement'.

In recent years, France has seen its social republican welfare consensus unravelling at an accelerating pace. The main employers' federation, MEDEF [see Glossary for this and other acronyms], has launched an initiative for a new social constitution, advanced tactically through the threat of withdrawal from its co-management role of social protection agency (Bilous et al, 1999). However, the unions present a serious obstacle to this project and a popular, deep-seated attachment to the welfare consensus (Gelissen, 2001) translates into widespread opposition to liberalisation measures. In this context, the welfare state is seen as an 'immovable object' (Pierson, 1998) and radical reform is a high-cost political strategy--a lesson that Prime Minister Juppe was taught in 1995, when pension reform ultimately resulted in electoral defeat. This reality has led to a more pragmatic strategy for breaking the reform impasse, which we call 'social liberalism' (3). By this, we mean the introduction of significant reforms in the name of defending social citizenship rights against proponents of free market solutions. In short, change is presented as modernisation instead of privatisation. This strategy also involves the establishment of consultative mechanisms with civil society organisations, in an attempt to produce consensus for reform proposals prior to legislation. Such a strategy is evident in relation to pension reform and, significantly, has been championed by EU institutions.

Reforming French pensions the European way

The French pension system was a central pillar of the post-war social settlement, and is widely viewed as integral to French citizenship. Both basic and secondary occupational pensions, alongside 'special regimes' for public service workers, are financed on a pay-as-you-go (PAYGO) footing, funded through employer and employee contributions. This method of finance, known as repartition (literally, 'sharing out'), expresses a high degree of inter-generational solidarity and produces public pensions at 95 per cent of average male wages (Johnson, 1999). The French system has, therefore, been described as among the most generous, universal and egalitarian pension systems in Europe (Blackburn, 2002).

Previous attempts at pension reform have met with limited success. Those instituted by the Balladur government in 1993 focused on the private sector, indexing pensions to prices instead of earnings, and lengthening the contribution period. The subsequent Juppe administration attempted to extend these reforms into the public sector, targeting 'special regimes' and proposing tax perks for private pension funds. The Socialist government of Prime Minister Jospin repealed those reforms, and in 1999 introduced the first capitalised, funded pension into the French system. However, this relatively weak co-habitation government was slow in embarking on public sector pension reform. Co-habitation ended in 2002 with the election of President Chirac, followed by that of Prime Minister Raffarin.

Little time was lost in speeding up reform, not only of pension provision but also of education and healthcare, as part of a broader process of state restructuring. The centrepiece of this was the liberalisation of France's energy sector. An indication of the European dimension to such reform was given at the Barcelona Council of Ministers meeting in March 2002.

A deal brokered by Prime Minister Jospin, supported by President Chirac, enabled compliance with European Directives on opening up French energy markets to international competition. This neutralised opposition from EU member states, while wrong-footing domestic critics through its presentation as 'controlled liberalisation', guaranteeing the principles of social dialogue and public service. The approach to reforming pension provision in France has also drawn significantly upon guidance from EU institutions.

Documents published by the European Commission (2000) and the European Council and Commission (2003), have preached 'demographic doom-mongering' (Blackburn, 2002), warning of a looming pensions crisis in which ageing populations threaten to overwhelm public finances. The remedy for saving the 'European Social Model' from a demographic time-bomb, the Commission argues, is to strike a balance between public and private pillars of the pension system. Certain options, such as increasing immigration or raising employer contribution levels, are ruled out as unrealistic or inadequate.

Instead, the preferred solution is to make the pension system 'employment friendly', increasing contribution periods and raising the real retirement age. This, as Blackburn rig, lady concludes, could result in a hybrid form of privatisation, with workers forced into the private sector for secondary pensions.

EU institutions recognise that implementing such a model of pension reform is 'politically difficult'. Therefore, member states have been provided with guidance on how to ease the passage of reforms. Information is identified as a 'driver of change', which translates into publicity campaigns to raise public awareness, and the use of surveys to monitor public confidence in pension provision systems. For instance, a Eurobarometer survey found that, in France, over 70 per cent disagreed with raising the retirement age, and 40 per cent disagreed strongly.

The Commission also advised member states to manufacture consensus through involving interested parties as partners in policy development, thus integrating 'social partners' into consultative mechanisms alongside legislators and experts, and thereby achieving a concerted opinion prior to the announcement of reform proposals. Procedures and agreements reached with Spanish and Irish unions have been promoted as exemplary practice. France, meanwhile, is identified as in particular need of debate and concertation.

However, given low levels of union representativity, directly transposing such an approach to the French context could prove more problematic. Nevertheless, in the next section we show how the French government drew upon this European approach in order to disconcert the unions.

Opposing the reforms

Before addressing the opposition to general pension reforms, we recount some pertinent events in France's state-owned gas and electricity concerns during 2002 and 2003. In December 2002, four of the five main unions agreed to transform the special pension scheme into a public fund, thereby ridding the balance sheets of a financial burden that precluded EDF/GDF becoming limited companies as a prelude to stock market flotation. The union response to the eventual agreement is illuminating: the CFDT signed the agreement; FO refused outright, viewing it as a privatisation process; while the CGT successfully demanded a consultative referendum of EDF/GDF workers and pensioners. It was held on 9 January 2003, with 59 per cent of workers voting for rejection (CGT, 2003). Under pressure from both employers and the CFDT, the government decided to impose the agreement, thereby indicating its willingness to override consultative mechanisms. Encouraged by this outcome, prime ministerial aides advocated more union consultation over general pension reforms, at the expense of genuine negotiations (Rehfeldt, 2003).

On 6 January 2003 Chirac announced that, far from dismantling PAYGO in general pension schemes, the reform programme would maintain 'repartition', thereby following the Commission's model of gradual modernisation. Chirac also heeded EU advice on achieving consensus, calling for social dialogue throughout the reform process. However, the Government made clear its determination to proceed with legislation in the face of union opposition. Social Affairs Minister Fillon declared 'we negotiate with the unions, then Parliament votes. They are two distinct actions' (Jolivet, 2003a).

The unions initially displayed a united position, with seven national unions setting out common negotiating objectives and calling a demonstration on 1 February, which mobilised 500,000 workers. However, this outward display of unity masked divisions between unions that became apparent during the consultation period. Union objectives established through consultation in the Pension Stewardship Council (COR), which comprised social partners, parliamentarians and experts, indicated common ground around which a concerted approach to reform between unions and government might be achieved. The union objectives accepted longer working-life contribution periods and called for retirement at 60 (rather than 55), while prioritising active employment policies to end age discrimination against older workers. This hinted at unity around the CFDT's more reform-friendly proposals. General Secretary Francois Chereque stated that the government's proposal to achieve a balanced budget while ensuring a decent pension showed that it had listened to employees. However, there was no agreement to defend the 37.5-year contribution period--a key demand of the CGT and FO which, due to Balladur's 1993 reforms, contained significant mobilising potential.

Fillon hosted bilateral consultations with the social partners between 6 and 12 February 2003, and meetings continued through to the publication of the bill. These disconcerted the unions, leaving them unsure as to whether they were engaged in consultation or negotiation. There was also mounting discontent among union members. A heated debate at the CGT's congress, held 22-28 March, added impetus to calls for restarting protests. The government continued its consultation process, finally declaring its concrete proposals during a bilateral meeting on 18 April, and a draft Bill was issued on 7 May. The most significant reform extended the contribution period for public sector workers from 37.5 to 40 years by 2008; to 41 years by 2012; and to 42 years by 2020. The other main measures were aimed at cutting early retirement by introducing incentives for older workers to remain in work. Such reforms were apparently designed to meet Err observations about the need to ensure equality between private and public sector workers, and to guarantee the increased labour market participation of older workers. Faced with a unified union call for strikes and demonstrations on 13 May, the government heeded EU advice to inform the public, and provided two advertising agencies with 20 million [euro] to explain the reforms (Jolivet, 2003b). Nevertheless, polls indicated that there was 60 per cent public support for the protests, and 13 May saw two million protesters take to the streets of over 100 towns and cities, greater than at the height of 1995's mobilisations. However, unlike in 1995, this impressive day of action was not converted into an effective movement. As the Bill progressed through various councils before its presentation to the Cabinet, Fillon convened further meetings with the unions for 14 and 15 May. It was during these meetings that the disconcerting and divisive effects of concertation became most apparent.

On 13 May, CGT General Secretary Bernard Thibault appeared on television calling for more negotiations. The following day CGT members, responding to calls from general assemblies of strikers for strikes to continue, were called back to work by their union. (4) On 14 May, the government produced an amended paper with cosmetic changes that all the unions refused to sign. It thus became increasingly obvious that the government was willing to consult the unions, but not to enter into meaningful negotiations. The CGT refused to attend the meeting on I5 May and FO walked out. The CGT called for 'real negotiations' and attempted to impose them through mobilising temps forts (shows of strength) as regular days of action. The CFDT attended the meeting on 15 May, emerging with what Chereque presented as an acceptable compromise. But it failed to secure the lowest level of pensions, at 100 per cent of the minimum wage, as set out in union objectives. Chereque drew praise from Raffarin, but accusations of treason from other unions and CFDT members. On subsequent demonstrations, militants chanted, 'Chereque-Fillon demission!' [resign!]. Chereque was a notable absentee from the Socialist Party conference beginning the following day, while Thibault was greeted triumphantly (Jolivet, 2003c). This political coronation was not, however, translated into defeat of the reforms.

The government focused attention on apparent inequalities in the pension system, using the language of fairness to portray 'special schemes' as anachronistic privileges. The CGT did not challenge such arguments head-on, declaring itself insufficiently influential in the private sector to be able to develop the existing, one-day, 'inter-professional' public sector strikes into a general strike. Yet such demands were evident during mobilisations on 27 May, as 'coordinations' of private and public sector workers chanted '37.5 pour tous' [for all] and 'Public, Prive, Solidarite'. (5) But unions, like FO and 'GIO Solidaires', that supported such demands were marginalised by the government, which identified the CFDT as a responsible partner for change. As the days of action continued, more strident government figures such as the interior minister, Sarkozy, were given a freer rein to repress strikers. This contributed to growing demoralisation among strikers, and to the demobilisation of street protests. A progressively lower percentage of workers struck and demonstrated, and by the final day of 'diverse initiatives' on 26 June, temps forts had deteriorated into ineffective protests that invited workers to express their opposition by participating in picnics.

Despite the much-promised filibustering from Socialist and Communist deputies, the legislation progressed swiftly, passing through Parliament in July 2003. And although these reforms are considered incomplete, funding only a third of the pension deficit up to 2020 (Financial Times, 2003), their major significance is that the reform impasse has been broken by a strategy that disconcerted the unions. But the pensions struggle also contributed to a process of union realignment that promises the recomposition and possible revitalisation of the French labour movement.

Union realignment

Despite enduring distinctions and divisions, it is apparent that union strategic identities can be understood increasingly through the dichotomy of 'social partnership' and 'social movement'. The CFDT'S adoption of the social partnership model is closely tied to its support for the social and political development of the EU, which it identifies as vital in civilising globalised markets (CFDT, 2002). Chereque has identified inertia as the main threat to social rights, and has called upon workers to engage positively with reforms in order to save their entitlements (Capital, 2003). Criticising the 'conservatism' of other unions, the CFDT positions itself as social partner of choice for reform-minded governments. However, this strategy has resulted in internal divisions in the CFDT, propelling secessions from its central organisation by local, regional and industrial sections (Masson, 2003).

The CGT adapted its historical identity as a 'union of protest', in 1999, to a strategy summed up as 'protest-mobilisation-proposal-negotiation' (Rehfeldt, 1999)--a description that captures its attempt to mobilise protests in order to assist with the negotiation of improvements to proposed reforms. However, this strategy was disconcerted by the government's substitution of consultation for negotiation. The CGT argues that it faces an historic choice between being a 'partner in reform', and resurrecting a more militant strategy. The EDF/GDF experience suggests that CGT leaders may be prepared to countenance pragmatic liberalisation (Le Monde, 2002). Thibault has already faced challenges from militants dissatisfied at his apparent trajectory towards 'reformism': rare in an organisation accustomed to consensus (Pernot, 2003). However, a potentially more serious challenge is posed by unions such as FO and GIO Solidaires (SUP), which represent so-called 'modernisation' in terms of a choice of society, and seek to harness public sector militancy to a broader social movement that defends the values enshrined in 'acquired social rights'. The emergence of this challenge in EDF's Research and Development department--a CGT stronghold--in mid-March 2002 was shown in a breakthrough vote for SUD-Energie which surprised political commentators. It won 24.22 per cent in its first election, at the expense of the CGT (34.99 per cent) and the CFDT (22.10 per cent) (Galinier, 2002).

For FO, pensions pose a fundamental choice: the individual or the collective; (neo)liberalism or solidarity? FO rejects corporatism, advocates union independence from the state and employers, and aims to defend social rights through a strategy of 'demand, mobilise, negotiate' (FO, 2003). FO's republican, and somewhat nationalistic, emphasis on defending social rights has made it increasingly sceptical about European integration, and critical of the ETUC's failure to achieve a social Europe due to its reliance on social partnership. By counter-posing the question of a choice of society, and affirming its commitment to key values such as equality and solidarity, FO positions itself as a social movement willing to defend 'acquired social rights'. However, it may be hindered in developing along these lines by its hierarchical internal structures, which reflect those of the public policy mechanisms that epitomise the social republican consensus established along with FO in the post-war period.

This encumbrance is not shared by the GIO Solidaires (SUP). Having gained substantial support through the 1995 strikes, it has developed structures that enable greater grass-roots participation. GIO also possesses certain other influential advantages in developing a social movement strategy.

It is highly visible throughout the public sector as a militantly anti-neoliberal union, and has developed organisational alliances with other social actors such as the unemployed and the homeless. GIO has advanced beyond defensive positions, advocating new social rights such as a guaranteed basic income.

It has also been able to 'reflect on the causes and not only to act on the consequences' (SUD-Rail, 2003), thereby relating effectively to the anti-globalisation movement. Consequently, GIO activists have been effective at building international links through events like the European Social Forum.

The European dimension to state restructuring and union realignment is particularly significant in the context of the report of the EU High Level Working Group on Industrial Relations (2002a), which states that social concertation around issues of public policy will encourage unions to reshape their identities. However, the French pensions struggle demonstrates that, despite European influence, this process takes a densely national form. It has been observed that the French industrial relations system makes comprehensive consultation difficult, thereby making social pacts unlikely (Ebbinghaus & Hassel, 1999).

Nevertheless, while concertation and associated methods of the European model continue to be effective in disconcerting the unions, their continued application may mark a pragmatic path for projects of state restructuring. Unions, consequently, are undergoing a process of recomposition and realignment that may serve to tie them more closely to the restructuring project, or may lead to their revitalisation as key agents of a social alternative.

Glossary

CFDT--Confederation Francaise Democratique du Travail [French Democratic Confederation of Labour]. This is the largest French union confederation, with 800,000 members. It developed from the secular majority in Christian trade unionism, before adopting a radical 'self-management' philosophy in 1970 and 're-centring' itself in 1979. It is a member of the ETUC.

CGT--Confederation Generale du Travail [General Confederation of Labour]. This is France's oldest and second-largest union federation, with 650,000 members. The strong relationship it had had with the French Communist Party since 1920 was severed at the union's 47th Congress in March 2003. It recently joined the ETUC.

EDF/GDF--Electricite de France/Gaz de France. This is France's largest company, established in 1946. EDF has expanded, over the last ten years, into Europe, South America, Asia and Africa.

In 2002, EDF had a turnover of 48.4 billion [euro], 45 per cent of which was earned outside the French market. Its objective is for this figure to reach 50 per cent by 2005. GDF's net annual sales totalled 8,849 million [euro] on 30 June 2003, up 12.9 per cent on the previous year. Its net income reached 816 million [euro], up 6.5 per cent.

ETUC--European Trade Union Confederation. Established in 1973 to provide a trade union counterbalance to the economic forces of European integration, the ETUC is recognised by the European Union as the only representative cross-sectoral trade union organisation at a European level.

FO--Confederation Generale du Travail--Force Ouvriere [General Confederation of Labour--Workers' Power]. The FO is the result of a 1948 'cold war' split from the CGT, over Communist influence in the union. It was an early member of the ETUC.

G10 SOLIDAIRES--Group of 10 'Solidaires'. An anti-neoliberal union confederation with 80,000 members, including SUD--Solidaires, Unitaires et Democratiques. It is the largest union in tax offices and the second-largest in the postal and rail sectors. Deeply involved in World and European Social Forums and in the anti-globalisation movement, it is not a member of the ETUC.

MEDEF--Mouvement des Entreprises de France. Created 27 October 1998, it represents more than 750,000 businesses, 35 per cent of which employ fewer than 10 workers and 70 per cent fewer than 50 workers.

Notes

(1.) The authors would like to thank Sue Milner (University of Bath), Michel Husson (of the Institut de Recherches Economiques et Sociales) and Alain Baron (SUD-PTT) for the useful comments and suggestions they made on an earlier draft of this paper.

(2.) According to the European Commission (2002b), 'concertation' is defined as a 'method of managing labour, social and economic issues by means of consultation and social concertation between the public authorities and bodies representing employees and employers'.

(3.) The term 'social liberalism' was coined originally by Pierre Bourdieu to describe 'third-way' social democracy. The ideological zeal of this project has swiftly dissipated, giving way to a pragmatic approach to implementing a modernising agenda shared by governments of both 'left' and 'right'. For a discussion of 'Social-liberalism in France', see Bachet & Durand (2001).

(4.) 'Assemblies Generales' is the term used to describe the inter-union, localised collectives of strikers calling for all-out strike action and making unified demands on union leaders. This form of coordination was widely used for decision-making during the strike wave in 1995.

(5.) 'Co-ordinations inter-professionnels' ('inter-pro') is the term used to describe the cross-public-sector strike movement of May-June 2003, especially strong in provincial cities and towns where trade union members from different unions, and where different, mainly public sector, groups of strikers coordinated demands and activities.

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