French retailers, hoteliers warn – As French unions turn the screws, PM says reform...

PARIS: French retailers and hoteliers warned their crucial Christmas season could be spoiled if a strike, which was causing travel chaos for a second day on Friday, drags on for much longer. The strike, aimed at forcing President Emmanuel Macron to ditch a planned reform of state pensions, led to a drastically reduced service on trains, buses and the metro.

The transport disruption is expected to continue over this weekend and into early next week. “I had one client since this morning,” said Karine Barbe, 47, an employee in an embroidery shop in central Paris. “If the strike continues, clients are not going to come as there are no trains. The strikes, coming on the heels of the ‘yellow vest’ protests that started in November 2018, deal a new blow to retailers, said Francis Palombi, head of the French Federation of small retailers.

“2019 was a very difficult year for retailers with revenue losses. Some had to shut down because of this dramatic situation that may continue and even amplify. It’s very serious,” he said. Hotels in big cities received numerous cancellations ahead of the strike, Laurent Duc, the head of the French UMIH hotel federation told Reuters. “Its a disaster for retailers and hoteliers. As soon as tourists hear about strikes, they say: ‘We are not going to France, it’s going to be chaos in Paris’,” he said.

He predicted the strikes could cost hotels, on average, 10-15% of their revenue in December. In the eastern city of Lyon hotel cancellation rates were close to 30%, he said. The GNI trade federation of independent hotels said bookings were down 30-40% in Paris hotels while restaurants saw revenue fall 50%. Bigger stores in the retail sector said they could ride out the disruption. At upmarket department store chain Galeries Lafayette, a spokeswoman said that the group’s stores were open and that “everything was normal”.

French supermarket retailer Casino, owner of city center Monoprix stores, said that because the strike’s date had been known ahead of time, Casino had beefed up its stocks. Yellow vests anti-government protests have already taken a heavy toll on French retailers. Casino reported those protests, by blocking access to some stores, cost it 50 million euros in the fourth quarter of 2018 alone. Losses for the same period came in at 45 million euros for electronics good retailer Darty and 140 million euros for hypermarket group Auchan.

Reform unavoidable
Meanwhile, French Prime Minister Edouard Philippe said the nationwide strikes in the public sector would not weaken his resolve to reform the pension system but promised workers would be spared a brutal transition to the new regime. Philippe said he was not seeking confrontation with trade unions, which on Friday called for mass protests and strikes over plans to streamline one of the developed world’s most generous pension systems to continue next week.

The government wants to replace a byzantine system comprised of more than 40 separate pension plans, each with varying benefits, with a single, points-based system under which for each euro contributed, every pensioner has equal rights. “Citizens know that the hugely diverse nature of the current 42 pension plans cannot continue,” Philippe said in a televised statement. “They also know we’re going to have to work longer.”

On Friday, commuters faced severe disruption getting to and from work for a second day and the state-run SNCF railways said train services would remain impacted through the weekend and on Monday. Schools and hospitals were also left understaffed. A day earlier, tear gas and smoke hung over parts of Paris and Nantes as protests turned violent.

The strike pits trade unions determined to safeguard worker protections against President Emmanuel Macron, a 41-year-old former investment banker who took office in 2017 on a promise of opening up France’s highly regulated economy. The outcome will hinge on who blinks first – the unions who risk losing public support if the disruption goes on for too long, or the president whose two-and-a-half years in office have been rocked by waves of social unrest.

‘Painful’ reform
Macron appears reluctant to simply raise the retirement age of 62. One alternative is to curb benefits for those who stop working before 64 and give a boost to those who leave later. Room for concessions may lie in the pace at which the changes are phased in. Philippe on Friday left open the possibility of including a “grandfathering” clause for workers at the SNCF and Paris public transport firm RATP, some of whom enjoy special benefits including retirement at 52, a decade earlier than the average worker.

“To all RATP and SNCF staff I say that it would not be reasonable or fair to change the rules of the game after the game has started,” Philippe said. The government applied a similar approach last year when it changed decades-old terms of employment for SNCF workers, maintaining job-for-life guarantees for existing staff, but ending that benefit for new recruits. For now, public opinion is relatively evenly divided, surveys show. “We’re all in the same situation,” said commuter Micheline Rossi, sympathetic to the strikers’ cause. “With the points-based pension system, we’ll lose out, too, just like them.”

Another said: “We need to reform pensions. It’s going to be painful, painful for everyone. But if we want to have a pension in the future, this has to pass.” Macron’s pension tsar Jean-Paul Delevoye is due to hold talks with the unions on Monday before the prime minister presents the broad outlines of the reform to the public mid-week. – Agencies