February 19, 2009 / 1:27 PM / in 10 years

France makes wage offer to quell island unrest

(Adds quotes, details, background)

By Elizabeth Pineau

PARIS, Feb 19 (Reuters) - The French government will make a new wage offer to unions on Guadeloupe where riot police have struggled to maintain control, a month into a general strike that is paralysing the Caribbean island.

"Mediators have come up with a proposal which I am going to approve and which will be submitted to employers and the unions," Prime Minister Francois Fillon told French radio RTL on Thursday.

"This allows us to get very close to the financial goals of the workers."

Protesters are demanding a 200 euro ($250) monthly pay rise for low income workers to cope with the high cost of living on Guadeloupe. Unemployment is high and average incomes low while islanders depend on expensive imports for many staples.

The strikes and demonstrations had been peaceful on an island which was colonised by France in the 17th century and is viewed as an integral part of the republic.

But this week youths shot dead a union leader at a barricade. Overnight they fired at security forces with hunting rifles and police made about 30 arrests. But the violence was at a lower level than on the previous night and no one was hurt.

The alliance behind the protest movement, LKP, blames the government for letting the dispute drag on until frustrated young people beyond the control of LKP turned to violence.

They have blocked roads, torched businesses and cars, and looted shops this week.

While the government had offered numerous concessions to the protesters, it had until Thursday rejected their key demand, that it lower business taxes to give companies some room to increase workers’ pay by the desired 200 euros.

With discontent simmering in mainland France as well, Paris was wary of creating a precedent in Guadeloupe that it would have to extend to the mainland.

The proposed settlement would not involve cutting business taxes but would bring forward the implementation of a new benefit for low wage workers and unemployed people, according to Yves Jego, the minister in charge of overseas territories.

Jego said on France 24 television that the method was different but the net effect would be the same, about 200 euros extra cash for some 25,000 people in Guadeloupe.

"We are trying to find answers to problems that are very different from those of the mainland," Fillon said. He added that he would travel to Guadeloupe to seal the deal if necessary.

President Nicolas Sarkozy, who caused anger in Guadeloupe last week when he failed to mention the general strike during a 90-minute television interview, is scheduled to meet legislators from the island on Thursday.

Later, he will address the people of Guadeloupe by radio. (Additional reporting by Colette Borda in Guadeloupe, writing by Sophie Hardach and Estelle Shirbon; editing by Robert Woodward)

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