Macron Faces Test Over Economy         12/06 06:18

   PARIS (AP) -- Massive strikes against a planned overhaul of the pension 
system are sending a powerful warning to French President Emmanuel Macron. 
Half-way through his term, the 41-year-old centrist is still determined to push 
through the reform and keep remodeling the French economy.

   Macron is facing a decisive test at the end of a turbulent year that has 
seen yellow vest protests agitate against his economic and fiscal policies.

   As the anti-government movement was petering out this summer, protests 
against the pension plans emerged, leading to unions' calls for a general, 
open-ended strike this week.

   In what may look like the government's worst nightmare, yellow vests and 
angry workers marched together on the streets of French cities on Thursday.

   Macron considers the overhaul of the pension system, one of his key campaign 
promises, as "indispensable."

   The plans are the centerpiece of changes he says are aimed at modernizing 
France's labor market --- and a big challenge in a country with a long history 
of social struggles.

   The current system "is not good and is not fair," Macron said last month. 
"We are rebuilding a universal pension system, much fairer and accountable."

   The main focus of the reform is to unify the 42 different pension schemes 
into a single one --- so all workers have the same pension rights. The 
so-called special regimes, linked to certain professions, allow workers to get 
early retirement or other benefits.

   In Macron's view, the measure is needed to adapt to a more flexible labor 
market because with the current system, increasing numbers of workers who have 
had several different jobs and different statuses during their career have 
lower pensions.

   It is also aimed at making the system more sustainable, as a deficit is 
expected over the coming decade.

   But workers fear they'll need to work longer for lower pensions. 

   "This reform speaks to everyone," political scientist Dominique Andolfatto 
stressed. "It's going to have an impact on the pension level, on the retirement 
age, everyone is concerned."

   Last-chance talks between unions and the government will take place in the 
coming days. An official at the French presidency, who was not authorized to be 
named publicly, suggested the government is ready to accept some changes to the 
project.

   Notably, the government may offer to delay the implementation of the reform. 

   Macron will decide on the key measures in the coming days.

   The details, to be unveiled next week by Prime Minister Edouard Philippe, 
are much awaited. They will provide indications about how long people will need 
to work to get a full pension, and how and when those who allowed early 
retirement will make the transition to the new system.

   Macron has promised that the legal retirement age will remain at 62, but 
financial conditions will change to encourage people to work longer.

   The planned pension-system overhaul comes after economic measures that also 
prompted protests and strikes. Since he came into office in May 2017, Macron 
has eased rules to hire and fire workers and to make it harder to get 
unemployment benefits.

   Critics denounce Macron's pro-business policies as threatening the French 
welfare state. Yellow vest protesters accuse him of arrogance and of being out 
of touch with ordinary people.

   All year, Macron has made efforts to change his style, trying to appear as 
caring more about the concerns and grievances of the French.

   He conceded a package worth 10 billion euros ($11.1 billion) to the yellow 
vests --- such as a monthly bonus of 100 euros ($111) to boost the minimum wage 
--- and announced tax cuts to increasing purchasing power next year.

   The government says labor measures have started producing results, with more 
jobs created and falling unemployment.

   Macron's approval rating, which had plunged to record lows when the yellow 
vest movement broke out, has since slowly increased. It's now hovering around 
40% in most recent polls.

   The government wants to avoid a scenario like the general strikes of late 
1995, whose memories remain vivid among the French. They paralyzed the country 
for three weeks in opposition to plans to suppress the special pension regimes, 
and other reforms. The government was forced to abandon its plans.

   The situation this time is different, Andolfatto said, because unions are 
more divided than in 1995. He described protests against pension changes as an 
"addition of discontents," rather than real unity.

   Hard-left workers' unions are against Macron's plans, but some more moderate 
unions, considered reformists, may be open to negotiation, he stressed.

   "I have an ambitious project for the country", Macron recently said. "And I 
won't give up. Because I deeply believe that France is a great country which 
can face the challenges of the 21st century."


(KR)