France Reform: Macron Takes On Labor Aristocracy’s “Special Regimes”

French President Emmanuel Macron, who is pushing through this month with labor reforms, has not waited for the street to react before attacking another elephant in the closet: the national train company, SNCF.

In the cross-hairs are France’s “special regimes”— certain public sectors where employees have benefits which go far beyond what normal public and private employees enjoy. The first to go, as soon as July 1, 2018, according to the daily Le Monde, will be the SNCF’s generous retirement program which is held responsible in great part for the monopoly’s 44 billion euro debt.

At present on-board train workers can retire with full benefits, based on the last six months salary, at age 52, while other employees retire at 57. The average age of retirement at the SNCF is 55.  Legal retirement in France is 62 after contributing to the retirement fund for 168 quarters, or 42 years, and the sum is based on one’s best 25 years salary. Under the new plan, SNCF employees will contribute to the retirement fund and receive the same benefits as all those in the ‘general regime.’

Privileges which cost the tax-payer

The SNCF has 152,700 active employees while they are paying 270,000 pensions, according to Le Figaro. The retirees also benefit for life from a number of advantages including extremely low cost tickets for themselves and their family. Spouses and children under 21 of both active and retired personnel also get 16 free tickets a year. SNCF employees are offered subsidized housing and have access to free medical clinics, company owned vacation centers and organized package tours. The tab for all of this ‘privilege’ is picked up by the tax-payer. In 2016, the government had to subsidize the SNCF and other ‘special regime’ pensions to the tune of six-and-a-half billion euros.

President Macron says those who are within five years of retirement will not be affected by the reform. He also intends to end the SNCF monopoly and is pushing through with a Europe-wide directive to open train services to private operators by December 2019. Employees of the SNCF will be given first opportunity to work for the new companies.

Protecting  you is not to protect your status or job of yesterday,” the President said, according to the SNCF Les Infos magazine. “It is to protect you as an individual, to go to tomorrow’s job.” Macron said it would be “unjust” to ignore the problem because “if we don’t resolve the problem, it will be your children who will pay.”

In exchange for reforms, the president has promised to bail out the crippling SNCF debt. Unions are calling the deal “Blackmail.”images

The Unions are already warning they will not be guilt-tripped into abandoning their “rights” because of a debt they say employees are not responsible. “Our status has nothing to do with the present difficulties of the railroad,” Bruno Poncet of SUD-Rail union told Le Monde. The CFDT union, known as more moderate, is also ready for battle: “We will not allow the pure and simple suppression of the special regime which will lead to a lowering of pensions,” said Rémi Aufrere, General secretary of CFDT-Cheminots.

Other “special regimes” with similar privileges to be targeted in the future are the RATP and RER Paris regional transport, those in the semi-privatized electric and gas companies, the Central Bank and even clerks and employees of notaries. This month’s decrees, to be debated in parliament on September 22, will bring other public servants in line with the “general regime” of retirement and work contracts.

Emmanuel Macron will face his first big test on September 12 when the leftist CGT union takes to the streets to protest the labor reform decrees. Another national protest is being organized on the 21st by the opposition Insoumis Party. When the government tried to reform the SNCF in 1995, the strikes and protests paralyzed the country for weeks. What we have now, between the reforms of labor laws and the SNCF, is the making of a perfect storm. But the President has promised to reduce the public debt, nearly 100% of GDP, by eliminating 60 billion euros in government spending over the next five years and to bring the deficit under the 3% level imposed by the Maastricht treaty.