French Unions Plan Campaign Against Financial Crisis Following 3 Million Strong General Strike

Lisbeth Latham

More than three million people joined in the second day of strikes and mobilisations called by France’s eight main union confederations against the Sarkozy Government’s response to the financial crisis and in support of policies to defend jobs and the purchasing power of French workers and unemployed. The protests on March 19 reflected a significant growth on the size of the previous day of action on January 29 which mobilised 2.5 million people. With the government showing no interest in changing course, the debate over what the direction the campaign should take is deepening.

Unions are demanding actions to counter the impact of the economic crisis and to make capital rather than workers pay for the cost of the crisis. Central demands have included:

• Increases in the minimum wage and payments to the unemployed and pensioners;
• Increased social spending on public housing;
• Action to reduce job losses including bans on redundancies at profitable companies;
• Reversal of the tax cuts given to the rich at the start of the crisis;
• Reversal of job losses and restructuring of the public sector

The growth in size of the demonstrations and extent of strike action reflects widespread and growing public support for the strike. Recent opinion polls indicate that 78% of France believes the strike is justified, up from 69% in January. This growth in support has lead to increasingly desperate attempts to delegitimize the movement. Many media reports quoted police estimates of 1.2 million participating in the protests, however the Confédération Générale du Travail, (General Confederation of Labour - CGT), France’s largest union confederation, reported that the police estimate was issued at 8.15 am well before the protests actually started. The President of France’s largest employer federation MEDEF described protestors as “demagogues”.

The growing anger reflects a number of factors including the rapid growth of unemployment as companies shed jobs to improve their bottom lines. More than 100, 000 private sector jobs were shed in the last three months of 2008, a further 350, 000 expected to be destroyed in the first half of this year. The highest profile example is the French Oil Company Total, which announced in early March that it would shed more than 500 hundreds of jobs despite posting record profits in 2008 of 13.9 billion Euros.

At the same time the government is persevering with attacks on the public sector based on claims on having no money to sustain spending – but it has had little trouble finding the billions to fund its corporate bailout. In response to these attacks public sector workers have been involved in broader industrial action including university staff who have been conducting a seven-week strike.

Adding to the confidence and combativity of workers have been the militant general strikes conducted in France’s Colonies of Guadalupe; Reunion and Martinique. The Guadalupe and Martinique strikes were victorious following 44 and 38 day general strikes.

Despite the growth militancy – the government remains unmoved. On March 20, Sarkozy while acknowledging that the strikes reflected “how worried workers are by the economic crisis”, he ruled out any further spending.

Sarkozy’s refusal to meet the strikes demands is increasing the tension over the direction for the movement. In a joint media statement, the eight union confederations stated that the magnatude of the mobilisation says loud and clear that workers "do not want to pay for a crisis they did not cause". The statement indicated that the leaderships of the eight union confederations would meet on March 30 to discuss the next steps in the campaign.

On March 20, Jean-Claude Mailly, head of Force Ouvrière (Workers Force – FO) said they were “determined to keep up the pressure” and were considering calling new protests on May 1.

In a March 19 statement, radical union confederation Union Syndicale Solidaires (Trade Union Solidarity – Solidaires) called for the momentum of the day’s protests and strikes to be extended. The statement argued that struggle facing workers was who would pay for the crisis – the rich or workers, unemployed and pensioners. The statement continued “In order to deal with the social crisis and the need for alternative policies” required the building of a movement to build a general strike.

Solidaires call for an ongoing general strike has been supported by a statement issued by Nouveau Parti Anticapitaliste (New Anti-Capitalist Party – NPA) Olivier Besancenot on March 19. Besacenot said “The general strike on Thursday, 19 March was an even more significant success than that of 29 January”. Besacenot continued “that very evening, [French Prime Minister] François Fillon gave the finger to 3 million demonstrators, by staying the course on the policy of finding tens of billions only for those responsible for the crisis while telling the strikers and protesters that the coffers are empty when it comes to jobs or wages.

“Such a success and such a government provocation deserve better than the announcement of a new meeting of trade unions on 30 March.

“Twentyfour hours of strikes and demos are not enough to make the government and employers bend. Only by a prolonged general strike can we make them meet our demands: prohibit layoffs, increase wages, and lower prices”.

MRZine have provided English Language Translations of both the CGT’s and Olivier Besancenot’s statements.
Solidaires' Statement is available in French.

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French Unions ready for a General Strike on March 19

Lisbeth Latham

On February 10, the eight major union confederations in France called for a new general strike for March 19 to continue their campaign to defend jobs and living conditions in the wake of the global financial crisis. The strike was called following French President Nicholas Sarkozy formal response to the January 29 General Strike that involved 2.4 million French workers.

On February 5, Sarkozy had appeared on national television in an attempt to defend his government’s response to the crisis which has seen it pump €48 billion in aid to business, particularly French banks, while taking no action protect either jobs or the purchasing power of the low paid. During his speech Sarkozy not only defended the government’s current strategy, but pledge provide a further €8 billion in aid to business by reducing some business taxes in 2010. At the same time Sarkozy ruled out either a reduction sales tax or an increase in France’s minimum wage. Sarkozy indicated that he remains committed to a 10% reduction in the French public sector that he has been pushing since his election in 2007.

The union federation Union Syndicale Solidaires responded on February 5 saying that while he could give billions to business his answer to other sectors of society was no. The Solidaires statement went on to say that the government had simply entered a new process of explaining the benefits of its policy, a policy that had already been massively rejected by French workers through the general of more than two million.

Solidaires stated “Sarkozy is trying to pretend that he has compassion for the victims of the crisis, but he forgets to say that this crisis is the capitalist system, liberalism at all that hair so ardently defended. And it persists in a policy that not only will not help to escape, but can only make it worse especially in once again reducing tax revenues.

"There should be a strong general increase in wages, pensions and social welfare and the prohibition of layoffs in companies that make profits. We must ensure the maintenance of pay and social protection of workers regardless of their situation. Beyond that, we must direct economic activity towards the satisfaction of social needs (including housing construction) and the implementation of environmental requirements (such as giving priority to railways over roads for freight).

“It is clear today that the president is not ready to change his policy, or even to discuss the contents. We must now continue and further strengthen the mobilization of the masses, as soon as possible. It is this perspective that the Union Syndicale Solidaires will put forward at the inter-union meeting on February 9.”

While the unions did initiate a strike for March 19, they also accepted Sarkozy’s invitation to a meeting with himself and business leaders. In a joint statement indicating that the government's response "remains far from that expected and demanded by the mobilisation on 29 January". The unions indicated that the precise form that the march 19 action would take would depend on the outcome of scheduled meeting between Sarkozy, unions and employer groups on February 18, and that they are looking for "concrete proposals" at the summit.

At the February 18, in an effort to quell anger Sarkozy offered an increase in social spending of €2.65 billion. While under the plan social spending would be increased it would do nothing to substantially increase the declining purchasing power of lower income families or to protect jobs.

In a joint statement issued by the eight union confederations said that they considered that the measures proposed were too fragmentary to change the course of economic policy. They continue “moreover, the President refuses to increase the minimum wage, to change his policy on reducing employment in the public sector or to reverse the tax on overtime.

“The crisis requires answers to a whole new scope. The effects of the economic and financial crisis and add to the growing concerns of employees. The renewed job cuts; the use of part-time employment amplify the recession and contribute to declining purchasing power”.

The unions renewed their call for a cross union day of strikes and demonstrations across France on March 19 to demand that the government and employers:

• Maintain employment in public and private sectors;
• Fight against insecurity and social and economic deregulation;
• Require compensation policies that maintain the purchasing power of wage earners, the unemployed and pensioners, and reduce inequalities;
• Defend the collective framework of solidarity and social protection, quality public services.

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THERE IS A BETTER, FAIRER WAY

Below is the full text of the ICTU proposal for a recover of the Irish economy. I'll be writing some fuller comments on the plan over the next few days.

Congress Plan for National Recovery



Irish Congress of Trade Unions
February 2009

Introduction
Congress has consistently advocated the adoption of a Social Solidarity Pact as a better and fairer route to national recovery.

On January 28, Congress, Government and the employers settled on an outline Framework Agreement, which was to provide a basis for more detailed discussions on a National Recovery Plan.

The Framework committed all parties to a plan in which “all sectors of society contribute in accordance with their ability to do so, and….the most vulnerable, low paid, unemployed and social welfare recipients are insulated against the worst effects of recession.”

But Government failed to follow through on this commitment, which envisaged no less than a coherent response to all of the major issues facing working families.

They resorted instead to a narrow focus on the public finances - without seeking a contribution from the wealthy. Their intent is to achieve a competitive devaluation of wages across the economy, as we are no longer in a position to devalue the currency. Ironically, a currency devaluation would be more equitable, as it would reduce living standards for everyone, not just workers.

Congress remains committed to the concept of a Social Solidarity Pact and here we present 10 key initiatives that we believe must form part of such plan or agreement.

Our preferred option is to engage with all parties on these initiatives but if that is not possible, we will embark upon a major campaign to achieve a change in policy, commencing with nationwide demonstrations on February 21.


1. Protecting Jobs & Tackling Unemployment
Our social welfare system must be radically altered and integrated with skills enhancement, education and training. In a number of European countries, unemployed workers are guaranteed incomes of 80 percent of salary for two years, conditional on their participation in extensive training and upskilling. Employers are also assisted to identify alternatives to redundancy, such as short term working weeks and other arrangements.

A similar scheme, modified for Irish conditions, could be funded by amalgamating current expenditure on benefits with additional funding from the Public Capital Programme (PCP). This approach should be complemented by reprioritising the PCP to support job protection and labour intensive activities.

2. The Banking System & the Public Interest
The Bank Recapitalisation Programme involves handing over €7 billion of public money, from the Pension Reserve Fund, to the same people who presided over the collapse. Their refusal to forego enormous personal salaries and bonuses speaks volumes about their contempt for the taxpayer. That €7 billion must not disappear into a black hole and only one consideration – the public interest – should inform Government decisions on this crucial matter. And given all that has emerged about the conduct of senior bank executives, we require a complete overhaul of Corporate Governance and clear indications that wrongdoing will be punished. Support for the banking system should be conditional on:

• public control, either through Recapitalisation or Nationalisation;
• a legally-enforceable obligation to provide support for innovation and development in the economy, along with credit and support for business cash flow, where it can be shown that it is critical to job protection or creation;
• replace all top executives responsible for the crisis, in the relevant banks;
• remuneration from all sources for those at the top must be capped;
• three year moratorium on home repossessions, where people cannot pay due to redundancy or unfair dismissal.
  

3. Competitiveness.
In addition to the absence of a properly functioning banking system, the most immediate threat to our competitiveness comes from the weakness of Sterling, not wage rates. This accounts for about two thirds of the deterioration in recent months.

Energy prices must be reduced and the only impediment to this is the nonsensical regulatory regime that has pushed prices higher to ensure private generating companies make a profit. Coupled with the failure of our broadband infrastructure - following the privatisation of Eircom - this demonstrates the critical importance of strategic state intervention in the economy.

Our cost of living in Ireland is some 20 percent above the European average. Failure to pass through gains from a weakened Sterling and high professional fees are an unjustifiable drag on competitiveness.

4. The Pay Agreement
Congress continues to adhere to the Social Partnership agreement. The Government, CIF and IBEC have now, in effect, reneged on the pay deal they negotiated in September 2008. Yet, significant numbers of private sector companies have paid the first phase of that deal and others have committed to doing so. No credible reason has been advanced to explain why the ‘inability to pay’ clause has not been utilised.

This is no less than a campaign against wages, as an alternative to a currency devaluation, to promote competitiveness. But the state of the global economy is such that wage devaluation is unlikely to have much impact on exports, whereas it will seriously depress domestic demand.

Ultimately no incomes policy can have credibility unless the remuneration of senior company executives is curtailed, as has happened in the US.

5. Fairness & Taxation
The Framework Agreement includes commitments to fair and progressive taxation measures. But Government must spell out what this means in practice. How much of the €2bn shortfall will be carried by the wealthiest in the country? We believe the following reforms should be introduced:

• Income from all sources – capital and labour - must be taxed the same;
• Tax exiles must stay away if they don’t want to be taxed here;
• Tax shelters without a proven economic gain should be abolished;
• A property tax should apply to property other than the principal private residence;
• The levy on high earners (above €100k) should be graded upwards significantly;
• A new rate of income tax at 48 percent for high income earners;
• Abolish hospital co-location, with its generous tax breaks for developers.
  

6. Restoring Consumer Confidence
The property boom encouraged unsustainable levels of credit and spending. This has now been reversed and people are frightened to spend. This fear is paralysing the economy as people are worried about unemployment, pensions and repossession of their homes. As almost half our GDP comes from consumer spending, this has enormous implications. It undermines employment and jeopardises the survival of businesses. The state also loses out on tax revenue.

It is imperative that people’s fears are addressed. The failed policies of letting the wealthy off the hook, while forcing working families pay for the crisis, has already led to a slump in consumption unparalleled elsewhere in Europe. Retail sales in Ireland have been falling at an annual rate of 8 percent, as compared with the EU average of one to two percent. Recent VAT increases have exacerbated the problem.

Policy to date has been almost exclusively deflationary in practice. Surely the most sensible option is to stimulate the economy, rather than dampen spending and growth? To this end, all parties must now return to the negotiating table to agree a resolution of the situation on the National Pay Agreement, to provide people with some confidence for the future.

7. The Public Service ‘Pension Levy’
We acknowledge there is a crisis in the public finances. Government must return to the Framework Agreement of January 28. This recognised the necessity for radical measures to bring the public finances under control, on the basis of all sides contributing in accordance with their ability to do so. Until that happens there can be no sustainable plan for national recovery.

The so-called ‘Public Service Pension Levy’ is a crude and unfair instrument. As currently structured it is a straightforward pay cut. It has no regard for ability to pay. Indeed, some people on lower incomes pay proportionately more than those on higher pay. Apart from seeking to tackle the public finances without charging the wealthy a cent, it is also part of a strategy to drive down wages across the economy.

Workers did not create the problem, but will contribute to resolving it - as long as the wealthy also contribute. The problem with the course currently being pursued by Government and employers’ organisations is that the weakest suffer, while the wealthy contribute nothing.

8. Pensions
Private sector pensions are in crisis and there is increasing doubt about the long term viability of many funds. Government cannot stand by and allow people to emerge with nothing, having worked and contributed to a fund for perhaps 40 years. Waterford Crystal is a case in point.

Congress wants the National Pension Reserve Fund to be used as a Pension Protection Fund – which EU law requires us to establish. It has not escaped people’s notice that there is official reluctance to use it for this purpose and none whatsoever when it comes to propping up the banks.

Other innovations suggested by Congress include a state backed annuity and the possibility that private pension funds could have the option of voluntarily surrendering their assets to the state, in return for a certain level of guaranteed pension.


9. Employment Rights Legislation
In Towards 2016 Government committed to enacting a programme of legislation to protect the rights of all workers in the context of EU enlargement. The aim is to stop exploitation of workers regardless of nationality. Recent events in the UK demonstrate the need to get this legislation enacted quickly.

10. National Recovery Bond
It is clear that people are anxious to contribute to national recovery. This spirit could be channelled positively by establishing a National Recovery Bond. While we have enough borrowings for the immediate future, the state will presumably need to borrow more next year. With the cost of this borrowing increasing, a domestic National Recovery Bond could save the exchequer a lot of money. It could also be targeted at specific sectors such as school building or public transport, so people could see tangible gains.

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Ireland: Workers reject bosses’ solutions to crisis

Lisbeth Latham

Irish unions are threatening to escalate protests against proposals that would result in workers bearing the burden of paying for overcoming the financial crisis that has hammered the Irish economy while protecting business profits.

Both employers and the government have sought to delay previously agreed upon wage increases for workers. The Irish government is also moving to implement a levy on public sector workers to help fund shortfalls in pensions.

On February 21, 150,000 people marched through Dublin as part of an Irish Congress of Trade Unions (ICTU) rally against the government’s handling of the economic crisis. The protest was the largest demonstration in the Irish capital for 30 years.

The Irish Times reported that ICTU general secretary David Begg addressed the rally, telling demonstrators that a business elite had destroyed the economy and had not yet been held to account for it in any respect.

According to the Irish Times, ICTU president Patricia McKeown told protesters that the government wanted workers who built the economy to make the sacrifices while it protected those who wrecked it, and that the time had come for Irish workers to demonstrate the power they held.

“That power is today on the streets of Dublin, it is in industrial action but most significantly it is at the ballot box”, McKeown said.

“If our government and the elected politicians are not prepared here and now to pledge that they will act now and act on our behalf and act on the proposals we have placed before them then you must be prepared to deny them even a single vote and to send that message out loud and clear.”

The Irish economy has been facing growing difficulties since early 2008 as a result of the global financial crisis. The Irish economy grew sharply during the 1990s, with neoliberal economic policies that halved taxation, reduced import duties and encouraged foreign investment.

However, since the start of the global economic crisis the Irish economy has crashed rapidly; there has been a flight of 10 billion euros in capital during February alone and a series of closures and downsizing resulting in the loss of thousands of jobs. According to the Irish government, the country faces:

• a reduction of up to 10% in national income over the 2008-10 period;

• a loss of more than 120,000 jobs over 2009 and 2010;

• an increase in unemployment to over 10%;

• tax revenues in 2008 that were more than 8 billion euros below expectations, with a further fall projected in 2009; and

• without further adjustments, a general government deficit in the range of 11-12% of GDP for each year up to 2013.

Social ‘partnership’ in crisis

Since 1987, a major characteristic of Irish politics has been the tripartite “social partnership” between the Irish government, employer groups and unions. Social partnerships have been triennial agreements, with the objective of reducing national debt by restraining wage growth, leading to a higher rate of profit growth compared to wage growth.

The most recent social partnership agreement was signed in June 2006 and titled Towards 2016. This agreement had a 10-year framework, but wage-fixing was to be renegotiated in a series of stages.

The second stage of pay terms were agreed to in September, with workers to receive a 6% pay rise over 21 months, following a three-month wage freeze in the private sector and an 11-month freeze in the public sector. Low-income workers receiving less than 11 euros an hour were to receive a 0.5% wage rise.

The agreement also exempted any company that is allegedly unable to afford the pay rises as a result of financial or trading difficulties. Despite this exemption, the Construction Industry Federation (CIF) refused to sign the agreement as it wanted a 12-month pay freeze in construction.

On December 4, the Irish Independent reported that the CIF “will today serve a claim on unions to cut 200,000 workers’ wages by 10pc”, just a week after it rejected the national pay deal.

In response to the economic crisis, employers, unions and the Irish government began a new round of talks to develop a recovery plan. The intention of employers to make workers bear the brunt of the crisis was made clear by the Irish Business and Employers Confederation’s January 23 demand that the previously agreed pay rises be deferred and the increase in the minimum wage be indefinitely delayed.

On January 28, all three sides in the negotiations signed a document that stated: “In developing a Pact, the Government and Social Partners are fully committed to an approach in which all sectors of society contribute in accordance with their ability to do so, and conversely the most vulnerable, low paid, unemployed and social welfare recipients are insulated against the worst effects of recession.”

However, on February 3, the Fianna Fail-led coalition government announced plans for an austerity plan that would cut 2 billion euros from the government’s budget.

The key features of the plan were a freeze on the wage increases for public sector workers previously agreed to under Towards 2016 and a sliding levy on public sector workers to fund government guaranteed pensions — effectively a wage cut. Even public sector workers who are not eligible for a government pension would be levied.

The attacks from both business and government have caused widespread anger across the Irish working class.

The leaderships of the ICTU and its affiliated unions are attempting to harness this anger and draw business and government into negotiations for a new social partnership — despite Irish workers experiencing a decline in real wages of around 3% per year during the first stage of Towards 2016.

In response to government and business withdrawal from the social partnership, Irish unions began organising protests aimed at lobbying government members of the lower house of Ireland’s parliament to oppose the austerity package, culminating in the February 21 mass rally in Dublin.

Trade unions have repeatedly called for the government and business to adopt their new 10-point Social Solidarity Pact, which includes a proposed 48% tax on high earners, full public control of the banks, a three-year moratorium on house repossessions, a national recovery bond, measures to protect the unemployed involving retraining and up-skilling, and income protection.

Unions are planning industrial action in defence of wages and conditions and in support of the Social Solidarity Pact.

On February 24, the ICTU executive council advised the federation’s affiliates that where employers were not adhering to the transitional agreement of Towards 2016, they were “entitled to resort to industrial action”.

The council advised that “to be prepared for this contingency, it is recommended that unions should ballot members” from March 2, “seeking a mandate for industrial action up to and including strike action, to achieve compliance with the terms of the Transitional Agreement, or to achieve an acceptable alternative”.

In addition to action by individual unions, the ICTU is calling a national strike for March 30 in support of the adoption of the Social Solidarity Pact.

Originally published in Green Left Weekly #785

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