February 28, 2018 / 3:30 PM / 4 months ago

UPDATE 1-France presses SNCF reform, dangles investments as unions waver

* Promises of 10 million euros a day over a decade for SNCF

* Fitch says could downgrade SNCF debt rating for investors

* Polls show Macron popularity fall, cite reform concern (Updates after Fitch warning on debt rating, adds SNCF boss)

By Brian Love

PARIS, Feb 28 (Reuters) - France’s government sought to overcome labour union resistance to a shake-up of the railways with a promise on Wednesday that the state-owned SNCF would receive 10 million euros a day of investment over the next decade.

In one of his most daring reform plans since he was elected last May, President Emmanuel Macron wants to force the SNCF to become more efficient and ready it for outside competition under an EU-wide liberalisation.

Macron has already stared down the muscular trade unions once when he loosened France’s strict labour code in the autumn, but in seeking to abolish the long-cherished, costly rights of rail workers, he is taking on a bastion of organised labour since rail nationalisation in the 1930s.

Under the government plans, new recruits will no longer enjoy jobs-for-life, guaranteed salary increases and other perks such as cheap holiday house rentals. Early retirement and generous pensions are also under attack.

Transport Minister Elisabeth Borne took to the airwaves to talk up the government’s investment pledges after a decision by the unions to hold fire on strike threats and meet again in mid-March - a move some saw as proof of disunity.

“Nobody has anything to gain from a protracted strike,” she told Europe 1 radio. Investment would rise by about 50 percent under the reform, she said, adding: “That’s 10 million a day”.

The last concerted effort to overhaul the SNCF as part of broader social welfare reforms in 1995 unleashed three weeks of rolling strikes that paralysed transport and precipitated the downfall of president Jacques Chirac’s prime minister, Alain Juppe.

There are positive signs for Macron in doing what nobody dared do before him. Opinion polls show broad public support for SNCF reform.

The state-appointed boss of the SNCF, Guillaume Pepy, is on board. He warned that refusal to reform would be “an amazing leap backwards” for the company when rival firms start being allowed to compete with it on French tracks in 2019.

The government has also said it could write off an SNCF debt of 47 billion euros, easing a burden that includes 1 billion euros of debt interest payments alone per year.

The Fitch ratings agency said it read that as a signal of state disengagement and announced that it may cut the safe-bet AA rating that SNCF debt has long enjoyed due to the implicit guarantee of state support.

MACRON POPULARITY DIP

The unions say Macron is laying the ground for an eventual privatisation of the SNCF - something the government denies.

While surveys show broad public support for SNCF reform, a poll published on Wednesday was the second in two days to show a drop in Macron’s popularity, driven by voter concerns over other social and economic reform.

The BVA poll showed his approval rating at 43 percent, down four points and one point above a low he hit in October after he announced cuts to wealth tax and social housing aid.

An Odoxa poll on Monday showed that while 69 percent favour SNCF reform, they are more evenly split over his government’s decision to reform by decree, bypassing votes in parliament, if necessary.

“Behind those voicing negative appraisals were the frequent accusations of arrogance or ‘he favours the rich’, or fears of purchasing power,” BVA said of its latest soundings. “But this month many spoke of the SNCF reform fuelling fears that public services will be dismantled or social rights eroded.”

Macron reiterated his “determination” to pursue the railway reform during a cabinet meeting, a government spokesman said. (Additional reporting by Sarah White and Jean Terzian; Editing by Richard Lough)

0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below