French pension bill passes, unions to battle on
PARIS (Reuters) - The French Senate approved an unpopular pension reform on Friday in a victory for President Nicolas Sarkozy, although unions opposed to raising the retirement age have vowed to keep fighting it.
Senators voted 177 in favor and 153 against the bill after the conservative government used a special measure to speed up the debate in the upper house, having had to send in police to break up long-running blockades of fuel depots.
The law to make French people work two more years for their pensions has been one of the most fiercely contested reforms among austerity measures being taken across Europe.
The Senate approval means it should pass quickly into law following signatures from a joint parliamentary council and a constitutional council on the final text.
"It is not by hanging on symbols of the past that we will remain a great nation," Eric Woerth, the labor minister in charge of pushing the reform, said in a speech to the Senate shortly before the vote.
Earlier on Friday, police rushed picket lines near Paris to break up a blockade of the main oil refinery supplying the capital as unions hardened their stance with further strike action in key sectors of Europe's second-largest economy.
Signaling their determination to keep fighting the bill after it becomes law, France's six main unions have called for two more days of protest action on October 28 and November 6.
"The protests are not stopping, we just have different views on how to proceed," Jean-Claude Mailly, head of the more radical Force Ouvriere union told RMC radio. "We still think that demonstrating is not enough ... we have to ramp it up ... we need a strong day of public and private sector strikes."
The government appeared equally determined.
Police in wielding riot shields cleared pickets and burning tires at dawn at Total's Grandpuits oil refinery southeast of Paris. Scuffles broke out at the plant and one person was carried away on a stretcher after being trampled.
Analysts did not expect the strikes to have any lasting impact on sentiment toward French debt. France comfortably sold short-term paper on Thursday though it paid a premium from previous issues on what analysts said may be fleeting concerns over its ability to enforce austerity measures.
"The crisis to date has had next-to-no impact on bond spreads in France," said Julian Jessop, chief international economist at Capital Economics. "I think there's a perception in the markets that this is just the French being French ...."
Sarkozy has been under pressure to end the long-running impasse with the unions before half-term school holidays beginning this weekend. His popularity ratings are near an all-time low 18 months before a presidential election in which he is widely expected to seek a second term.
In addition to transport disruption, Sarkozy is battling 11-day-old strikes at the country's 12 oil refineries and fuel depot blockades that Energy Minister Jean-Louis Borloo said forced the closure of one in five petrol stations.
Jean-Louis Schilansky, head of oil sector lobby UFIP, told reporters after meeting Prime Minister Francois Fillon that there was enough fuel to last for several weeks or months by increasing imports and pooling reserves.
"Sarkozy has declared war," said Charles Foulard, leader of the oil sector workers at the communist-led CGT union.
Sarkozy says the reform is the only way to limit ballooning pension shortfalls and protect the coveted "AAA" credit rating that allows France to borrow at favorable interest rates.
"If the French are not careful, they will soon join the PIIGS (Portugal, Italy, Ireland, Greece, and Spain) as the troubled economies of Europe," said professor Anthony Sabino, at St. John's University in New York.
The government is aiming to cut the deficit to 6.0 percent of gross domestic product next year based on an economic growth forecast of 2 percent in the first phase of a plan to trim the budget gap to the EU's 3.0 percent limit by 2013.
Sarkozy's pension bill raises the minimum retirement age to 62 from 60 and the age for a full pension to 67 from 65. The government hopes protests will now start to fade away.
Even with the reform, France will have one of the lowest minimum retirement ages in Europe. The broader measures Sarkozy is pushing through to cut the deficit are far milder than in countries such as Britain, which unveiled 80 billion pounds ($126 billion) in spending cuts this week.
Yet a poll for Canal Plus television broadcast on Friday showed an increase in support for the strikes from six days ago with 70 percent of French backing the industrial action. Polls show most people are against Sarkozy's pension bill.
Unions are betting that involving high school and university students -- thousands of whom demonstrated on Thursday -- and private sector workers could tip the scales and force the government to back down, as it did 15 years ago in the face of mass protests and transport strikes against pension reform.
But the number of young protesters remains far smaller than in 1995 or 2006 and the transport disruption less widespread.
Flare-ups of violence by masked youths in the central city of Lyon and in the Paris suburb of Nanterre have also blemished the peaceful and disciplined image of the protest movement.
Unions said marches this week drew some 3.5 million people, but the government put the number at just over a million.
(Additional reporting by Elisabeth Pineau and Henri-Pierre Andre; Editing by David Stamp)
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