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Europe, France

Popular Wisdom on France’s ‘social summit’


Today and tomorrow, government, unions and employers will be deep in debate at a “social summit”. Between the hopes of changing the world of work and employers bracing themselves for the same old recipes, there will be sharp confrontation.

Editorial by Paule Masson

July 9, 2012

Make efforts to improve the country’s finances? When asked, the French did not really say “no”, but they prefer those on high incomes to pay the bill. The Ifop survey released yesterday by the Journal du dimanche confirms this view. 53% favour increasing taxes on capital and 44% want the profits of corporations to bail out the state. It is said that popular wisdom reminds everyone what is common sense. Employees, the poor, those who work more than they own, know they have already paid a heavy price for the crisis. In terms of lost jobs, falling purchasing power and growing social insecurities, the toll has been heavy, very heavy since 2008. [The official statistics agency] INSEE is able to show how the 10% poorest households have had to break the bank to stay afloat: their average standard of living fell by 2.1%. The richest remain very plump, especially those statistically classed as the top decile [10%]: the assets held by 1.3% of the population, that is, with at least 85,000 euros a year, increased 92% while those of the poorest have not changed. Since the disparities of wealth and assets continue to grow, demands for ‘solidarity’ should first be placed with the property-owning class.

Unions also hope that this time, the balance will tip in favour of employees. Under Sarkozy, the summits, hastily organized, and in record time, were stacked in favour of employers. Francois Hollande today inaugurates a new approach. The two-day social conference will be around seven themes. Each theme will have a panel including a minister and a mediator to draft a summary. The government has in mind, it seems, to write the “social contract post-crisis.” Nothing less! For unions, with no lack of ideas to promote the interests of employees, this would potentially allow a glimpse of a patch of blue sky in the long tunnel of austerity. There are conditions, alas. Because the main decision that we are promised for now is to establish a calendar of social reforms. In the name of a “necessary evil”, that is to bend to the neo-liberal dogma of a deficit reduced to 3% in 2013. With this government, it is easy to multiply oxymorons. Francois Hollande wants to conciliate all: budgetary balance, efficiency, competitiveness, solidarity, social justice.

In the current European context, the task is, it must be said, pretty damn hard. Especially since in this respect, France is satisfied with a tiny dose of words on growth added in a package that leads straight into the wall of austerity. Added to this are bosses in battle stance. The president of [employers association] MEDEF, Laurence Parisot, will she dare she push ahead with her demand to ‘write free enterprise into the Constitution” ? Constitutionalize free and unfettered competition – does remind you of anything? It is precisely this headlong rush into deregulation of the economy that triggered one of the worst crises in history. Today, its proponents continue to present the bill to the people. To exit from the crisis, must we seek to reconcile everything to reassure the markets, or work to disarm them?


What’s being discussed

The summit has seven round tables on jobs, public service, pensions, economic recovery, incomes and training.

What the Unions Want
Unions have already declared that they will not be used as a rubber stamp and expressed shock at last week’s announcement of job losses in the civil service without any prior consultation.

  • They will be pushing for legal limits on layoffs by companies who are turning a profit and, after the largely symbolic rise in the minimum wage, and more help for those hardest hit by the crisis.
  • The largest confederation, the CGT, has called for ‘a law that provides a new definition of redundancy,’ aimed at ‘stopping’ the closure of profitable production sites.
  • More dialogue with unions should be accompanied by more industrial democracy, giving employees a role in companies’ ‘business strategies’.
  • The CGT has also called for a ‘complete overhaul’ of subsidies and social security and tax exemptions to companies worth 172 billion euros a year, with companies that are found to be discriminating against women workers or which pay below the minimum wage, punished. And it wants to see more effort in combating illegal employment.
  • It also calls for creation of public sector jobs like tax inspectors and labour inspectors which would prove ‘productive’, since their action would ‘bring in money in the [public] coffers’.
  • The CGT wants the government to set ‘the goal of creating one million manufacturing jobs by 2017,’ arguing that studies show that each manufacturing job creates four more in other economic sectors.
  • Despite employer moans about labour costs, they are lower in France than the European average.

What the Employers want

  • The president of employers’ association MEDEF, Laurence Parisot, wants to ‘write free enterprise into the Constitution.’
  • Employers warn of ‘catastrophe’ after the summer holidays, claiming that French industry is losing competitivity day by day.
  • They want a reduction in employers’ social security contributions and fear the minimal minimum wage rise is a sign of further government ‘interference’ in their right to manage and hold down wages in the future.

What the Government wants

  • Prime minister Ayrault has pledged that “the wealthiest taxpayers and the largest companies will make the biggest contribution to the collective effort”.  The richest households and businesses will  take brunt of €7.2bn tax rises this year with more to come in 2013. Inheritance tax, lowered by former President Nicolas Sarkozy, will rise. New taxes are aimed at bank profits, dividends, bonuses, stock options, big businesses and energy companies holding petrol stocks.
  • But public spending is set to be cut. The government will cut as much as 10 billion euros from the national budget to achieve its plan to cut the deficit by 3% in 2013, and this means thousands of public sector jobs will be at risk next year.

The grim jobs picture

Unemployment is already at about 10 million, with several large French companies, including carmakers PSA Peugeot Citroen and Air France  announcing plans to shed thousands more jobs. The  CGT union has named 46 companies it said were planning to shut production sites in a list published in French media late May that showed about 90,000 jobs threatened directly or indirectly.

And the economic crisis looks set to worsen. The Bank of France confirmed Monday its estimate that the economy shrank by 0.1% in the second quarter of this year, the first negative growth since France pulled out of recession in 2009.

The decline follows zero growth in the first quarter and if it lasts into the third quarter, it will mean that France slipping back into recession, as other EU countries like the UK, Greece, Italy, Portugal and Spain already have.

About revoltingeurope

Writer on Europe's Left, trade union and social movements @tomgilltweets or @revoltingeurope



  1. Pingback: France’s competitiveness ‘shock’ : a campaign of disinformation « Revolting Europe - November 4, 2012

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