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French premier hails social model and end of ferry strike
Martin Arnold and Adam Jones
10/24/2005
Dominique de Villepin, France's prime minister, has recently hailed the ending of a three-week strike over the privatisation of SNCM, the Mediterranean ferry operator, as proof that economic reform was possible without "breaking" the French social model.
Modernising France could only be achieved, he said, by keeping a generous welfare state, strong public services and dialogue with trade unions, unlike more free-market countries, such as the UK and US.
Without this "social growth" balance, reforms like the privatisation of SNCM would fail, he said. "We do not aspire to be British. We do not aspire to be American. We cannot mobilise French people without saying to everyone you will have your place, nobody will be left by the roadside."
The SNCM strike, fuelled by a potent mix of militant trade unionism and Corsican nationalism, provided the first big test for Mr de Villepin's appetite for reform. He had postponed decisions on other sensitive issues, such as this year's privatisation of electricity utility EDF, until the crisis was resolved.
Although his government backed down at the start of the dispute by promising to keep a stake in SNCM rather than selling it whole, Paris resisted pressure to retain a majority stake.
Trade unions voted recently to return to work at SNCM after the loss-making company warned it would file for bankruptcy if the strike continued.
Thierry Breton, finance minister, stressed that SNCM needed to "restore its image" and confirmed that Butler Capital Partners, the investment fund, would buy 38 per cent of SNCM; Connex, the transport group, would buy 28 per cent; the state would keep 25 per cent and staff 9.0 per cent.
Mr de Villepin said the ending of the SNCM strike showed his model of "combining growth and social justice" was preferable to a "rupture", a thinly veiled criticism of the more radical reform proposed by Nicolas Sarkozy, his interior minister and main rival for the 2007 presidential election.
But economics institute Rexecode warned France was not benefiting from global growth as it was losing market share in exports, while its restricted labour market stopped increased domestic demand translating into growth or jobs.
Mr de Villepin's comments, made at the launch of the Rexecode report, offer a foretaste of the arguments at the informal summit of European leaders at Hampton Court, London, on October 27.
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Under syndication arrangement with FE
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