Heavy bill on French economy as labor strikes continue to amend pension law

Between the closure of refineries and the disruption of transport, airlines and shipping, demonstrations and strikes rejecting the reform of the pension law are beginning to weigh heavily on the French economy, estimated to cost billions, as well as affecting the credibility and image of the country's economy in the global scene in general.

• What are the repercussions of the strikes on the French economy?

Camille Sarri, a professor of economics and international relations at the University of the Soprun, believes that the transport sector is among the sectors most affected by the weeks-long protests, with the French railway SNCF losing about 20 million euros every strike day, because it has to pay thousands of tickets and pay compensation to passengers.

As for public transport in Paris (RATP), the bill is 3 million euros per day, and 8 million euros for Air France.

Sarri estimates, in his interview with Al Jazeera Net, that the French GDP suffers from a decline of 0.3%, with expectations of reaching 0.6% if the demonstrations continue at the same pace.

Business and store activity is slowing by at least 20% on the day of the strike, especially in Paris, which is at the heart of demonstrations against the pension reform law, and 6 out of 10 companies are suffering a drop in sales volume due to the strike, according to the French organization of institutions MEDEF.

According to data from the Trade Alliance, the demonstrations on March 23 caused the daily trading volume to drop by 19% in Paris, 60% in Rennes, 30% in Bordeaux and 29% in Toulouse.

For its part, the Chamber of Commerce and Industry (CCI France) denounced the negative impact of the demonstrations on commercial activity, noting that domestic trade in France represents 634,3 companies and 5.<> million jobs.

Minister Delegate for Tourism Olivia Gregoire sounded the alarm about the impact of social mobility on the hotel and restaurant sector by between 8% and 23%.

• Which sectors are most affected?

Strikes and protests have disrupted vital sectors of the country, especially transport and energy, as a number of workers belonging to social movements shut down several nuclear power plants belonging to the Electricity of France (EDF).

Damian Martinez, a member of the federal administration of the CJT Union, says that "disrupting a nuclear power plant costs one million euros per day, and if we multiply this figure by the number of reactors in France, the bill will be very expensive."

This comes in conjunction with the country's inability to produce electricity due to maintenance work on a number of reactors, forcing it to buy electricity from other European countries, which doubles the final cost of energy.

In the fuel sector, French refineries have stopped production several times, and a number of stations are experiencing fuel shortages due to supply problems.

Martinez explains – in an interview with Al Jazeera Net – that unions do not choose certain sectors at the expense of others, because it is related to employees who strike from work, for example, the strike of cleaners did not have any direct economic impact, but it highlighted the size of the crisis and made everyone wonder what is happening in France all over the world.

• Why is the government trying to withhold information about the repercussions of the strike on the French economy?

Al Jazeera Net tried to communicate with the Ministry of Economy, the French National Railway Association, TotalEnergies and the Chamber of Commerce to obtain official figures on the damage caused by the strikes, but those parties declined to comment or provide a response.

Economic analyst Camille Sarri said that "this unjustified abstention is a kind of deception, because the government has all the detailed information about the current crisis, and its departments have people specialized in this regard, but fortunately there are reports that reveal the extent of the damage to the French economy."

Martinez, a member of the country's most prominent trade union, believes that the French government's withholding of information is linked to its unwillingness to give credibility to the protest movement, saying, "We can see this clearly in the big difference between the figures that we announce and those that the government reveals when talking about the number of participants during the protests.

• Is hitting the economy a pressure card to win the battle?

Trade unions and other opponents of the pension reform law, which French President Emmanuel Macron insists on, believe that the government has lost its battle against the protest movement, because the government has managed to convince the people of the need to reject the provisions of the law altogether.

"Our demands are just and legitimate, but the president of the republic has made his political choice to reassure his rich friends at the expense of the entire French people, which the local media are not talking about," Martinez said.

Since the demonstrations began in January, popular rejection of the law has reached a historic level, opening the door to expectations that the political opposition will be able to challenge reforms in order to propose a popular referendum on them.

"The culture of the workers' strike is not yet dead, and looking at the history of the social movement, we can boast that in 2006 the French were able to force French Prime Minister Dominique de Villepin to abandon the first employment contract (CPE)," which proposes new contracts for those under the age of 26 for a maximum of two years, during which employers can fire an employee without good reason.

• Will the French government acquiesce to save the economy?

Economist Camille Sarri confirms that the government will not retreat from the application of the new law, especially after resorting to Article 49.3 of the Constitution to pass reforms without the need for a vote from Parliament, because despite the loss of an important percentage of the French GDP, it may compensate for this after 10 years by guaranteeing 37 billion euros for pensions.

He added that Macron's government is betting on a gradual decline in the pace of strikes in the long term, because it is aware that strikers suffer a significant financial loss from their salaries every day they participate in the strike.

Although strike boxes run by a number of trade unions exist, they remain limited and unable to compensate hundreds of thousands of strikers across the country.

Sarri believes that the current demonstrations are weak compared to the demonstrations in 2006 when the French came out to protest against the "first work contract" under Jacques Chirac's presidency, for example, all metro lines in Paris and its suburbs were at a standstill, unlike what is happening now, where strikes do not completely and effectively paralyze transport.

At the same time, the economic analyst believes that the most important concern of Macron's government today is the radicalization of the social movement and its transformation into violence. In an unprecedented incident, the yellow vest movement burned an entire municipal hall in the Haute-Loire region in December 2018, and when the French president visited the site to support staff there, he was directly attacked by the yellow vests, but managed to escape them thanks to his armored vehicle.