SNCF Strike Is Macron's Biggest Reform Challenge Yet
(Bloomberg View) -- French President Emmanuel Macron's fight with public-sector rail workers will show how serious he is about economic reform. Unions are promising two days of disruption each week unless the president abandons his plan to expose the network to a whiff of economic reality. Macron should stand his ground.
A government-commissioned report published in February showed just how badly France's rail networks are failing. They receive 14 billion euros ($17.2 billion) in state subsidies each year, but still run an annual deficit of 3 billion euros. Their debt is 45 billion euros and rising. Despite these outlays, service quality -- already worse than in Germany and other European countries -- is deteriorating.
Meanwhile railway workers enjoy lifetime employment, automatic pay increases, free tickets for their families, and retirement at 52. Macron wants to narrow these exorbitant privileges -- only for new hires, by the way, not for the workforce as a whole. The unions are refusing to give way.
Employees at state-owned Air France, garbage collectors in the left-wing CGT union, teachers, nursery workers and other civil servants have also been striking. Macron has loosened restrictions on hiring and firing; cut business taxes; and proposed wide-ranging changes in education, training, pensions and other previously forbidden areas. Defeat on his rail proposals would embolden opposition and endanger this broader reform agenda.
Macron has a mandate to stick to his guns. He won office vowing to reduce the country's bloated public sector, liberalize the labor market, and free the economy to create growth and jobs. His victory was a sign that sentiment in France is moving against organized labor's traditional perks. In office, he's consulted widely and been open -- sometimes too open -- to tactical compromise, appeasing the left with gestures of economic nationalism and the right with tough talk on immigration. The rail strikes are a moment not for further accommodation but for standing firm.
It's easy to forget that only about 8 percent of French workers are unionized. In the past, public support has allowed organized labor to punch far above its weight. Today, the ground is shifting and Macron needs to press his advantage. The president must convince the country as a whole that he is a better defender of its interests than the unions.
--Editors: Therese Raphael, Clive Crook
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