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Government and business count cost of strikes

Government and business count cost of strikes
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On the 7th day of rolling strikes and protests against pension reform, France still has a long way to go to match the events of 1995. That autumn saw three weeks of paralysis amid protests against the Juppé government’s ill-fated pension reform plans.

In 1995 the stoppages brought a fall in economic growth of up to 0.5 percent.

The cost of strikes in more recent years has alarmed businesses and the authorities.

In 2007 the Finance Ministry said that each day of strikes cost around 300 million euros to the French economy – a figure that is thought to apply today.

The losses are perhaps a drop in the ocean in a country with a deficit of 160 billion euros, but they come on top of the damage already done by the financial crisis.

2007 saw a wave of strikes against reform of special pension arrangements in large public sector industries such as energy and transport. It cost businesses an estimated 50 million euros a day in the Paris area alone.

Today the state railway company SNCF estimates it loses 20 million euros each day that action by its workers cause serious disruption for travellers.

The fuel shortage is hitting hard. More than four thousand service stations have run dry following the blockade of refineries.

Consequently, petrol, diesel and kerosene prices have already risen by over two percent over the last few days.

For the past three weeks the country’s two main oil ports at Fos-sur-Mer and Lavera in the south of France have been blocked by demonstrators.

The cost of that already tops 30 million euros, and employers estimate that more than 200 jobs could be lost if the strikes continue.

Action by lorry drivers threatens to aggravate the situation.

80% of goods in France travel by road. Truckers are themselves hit by the fuel shortage. Meanwhile they are taking their own disruptive action in support of the pensions protest, hitting key routes with go-slows and blockades.

So how long can the protesters carry on? A rail worker loses more than 70 euros each strike day. Unions lose thousands of euros in protest-related costs such as organising demonstrations.

Economically there may be limits to their resistance. If the movement carries on into next week it is estimated that some unions may have used up their entire annual budget.

All of which pales into insignificance compared to the large hold in the pensions and social security budget – 22 billion euros – that the government hopes to repair with its reforms.