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Sarkozy: Europe faces ‘unprecedented crisis’

French President Nicolas Sarkozy warned Monday that Europe faces an "unprecedented crisis" but urged calm in the face of Standard & Poor's multiple eurozone credit rating downgrades.

Sarkozy issued the warning in Madrid where he was the first foreign leader to meet with Spain’s new conservative prime minister, Mariano Rajoy, since his swearing-in December 21.

“We are confronted by an unprecedented crisis that forces us to cut spending, lower our deficits but also to find the path to new growth by resolving our competitiveness problems,” Sarkozy said.

Standard & Poor’s cut the credit rating of nine debt-laden European countries Friday, including stripping France of its top-notch AAA rating and slashing Spain’s rating by two notches.

Moody’s Investors Service soothed some of the pain Monday, confirming France’s AAA rating while continuing to review whether it will maintain its “stable” outlook.

“Fundamentally it changes nothing,” said Sarkozy, who is facing an uphill battle for re-election in April.

“We have to reduce our deficits, cut spending, improve our countries’ competitiveness to rediscover growth,” he said, calling on people “not to panic” and to “react to these decisions by keeping our cool”.

“I don’t plan to take into account what this or that person says,” the French leader said, nevertheless describing the agencies’ ratings as “interesting elements”.

Spain’s leader, holding his first news conference since he took power, agreed.

“In the end, the most decisive thing is that each country follow its own path,” Rajoy said.

The new right-leaning Spanish government has announced €8.9 billion ($11 billion) in budget cuts, tax increases to bring in €6.28 billion and an anti-tax fraud battle to recoup another 8.17 billion.

Rajoy said at the weekend that Spain, which declared a towering 21.5-percent unemployment rate in the third quarter of 2011, now had an “astronomical” figure of 5.4 million jobless.

The Spanish leader gave his support to a French-backed scheme to impose a tax on financial transactions.

Sarkozy has said that France should not wait for other European countries to support the tax on financial market deals, a scheme dubbed a “Robin Hood tax” or “Tobin tax,” after Nobel Prize-winning economist James Tobin.

“Spain will support this tax,” Rajoy said, describing it as Sarkozy’s “war horse” to help beat the crisis.

Sarkozy was in Spain to be honoured for helping to battle the armed Basque separatist group ETA.

King Juan Carlos made Sarkozy a Knight of the Golden Fleece in recognition of his cooperation, saying he had been a constant ally in a ceremony in the Royal Palace.

“In your relations with Spain, you have always contributed in a constant, effective and generous manner to the fight against terrorism, always making the victims the aim and end of your solidarity,” the king said.

Spain credits Sarkozy with giving crucial aid in the fight against ETA, both as president and previously when he was French interior minister from 2002-2004 and 2005-2007.

Only on Saturday, French police arrested three suspected ETA members near Auxerre in eastern France.

ETA announced on October 20 last year the end of more than 40 years of shootings and bombings that killed 829 people. Its operations have been hammered by Spanish police working closely with France.

Spain’s highest chivalric honour, the Order of the Golden Fleece was created in 1430 by Philip III, Duke of Burgundy.

STRIKES

French protest pension reform again as unions threaten to step up action

Protesters once again took to the streets in towns and cities across France on Tuesday to call for the government to scrap its proposed pension reform as fresh strikes brought widespread disruption on transport.

French protest pension reform again as unions threaten to step up action

The third day of union-backed demonstrations since January 19th was set to test momentum for the protest movement which has vowed to block Macron’s bid to raise the retirement age.

The head of the hardline CGT union, Philippe Martinez, warned that more “numerous, massive and rolling” strikes were coming if the government did not drop the plan.

“If the government keeps on refusing to listen then of course things will have to be ratcheted up,” he said, as the demonstration in Paris got underway.

French leftist party La France Insoumise (LFI) leader Jean-Luc Melenchon (C) addresses media ahead of the start of the demonstrations on the third day of nationwide rallies against a deeply unpopular pensions overhaul at Gare de Lyon train station in Paris on February 7, 2023. (Photo by Sameer Al-Doumy / AFP)

Macron put raising the retirement age and encouraging the French to work more at the heart of his re-election campaign last year, but polls estimate that two-thirds of people are against the changes.

Lawmakers began debating the reform, which would see the age for a full pension raised from 62 to 64 and the mandatory number of years of work extended for a full pension, during a stormy session in parliament on Monday.

Mobilisations across the country

Last week’s demonstrations brought out 1.3 million people across the country while a first round on January 19 drew 1.1 million protesters, according to the police.

A security source told AFP that between 900,000 and 1.1 million people were expected on Tuesday.

French 24-hour news channel BFMTV reported that more than 200 rallies against the pension reform had been organised across the country on Tuesday.

Protesters gather at Place de l’Opera prior to the start of the demonstration (Photo by Sameer Al-Doumy / AFP)

The crowds so far have been the largest anti-government protests since 2010, during pension reform by right-wing former president Nicolas Sarkozy.

There were tensions in the western city of Nantes where protesters clashed with security forces who used tear gas pellets, an AFP photographer said.

Protesters in Nantes in western France shrouded in teargas face off with law enforcement during a demonstration on the third day of nationwide rallies against pension reform (Photo by LOIC VENANCE / AFP)

In Paris, French daily Le Parisien reported that within an hour of the march beginning, more than 2,200 people had already been subject to police checks.

Hard-left leader Jean-Luc Melenchon said Macron had to take account of the mobilisation on the streets.

“Unless he has become completely authoritarian, you need to be reasonable in a democracy,” he said, accusing Macron of trying to start his five-year term with a “show of force”.

The impacts of strike action 

Trains and the Paris metro again faced “severe disruptions”, while cancellations at Orly airport south of the capital were expected to total one in five.

The overall level of disruption, including in schools, was estimated to be lower than on the previous two days of action.

According to Franceinfo, 25 percent of French national rail workers walked out on Tuesday, in contrast to 36 percent during the previous day of action on January 31st. As for teachers, the French ministry of education estimated to Franceinfo that about 14.17 teachers were out on strike, compared to 25.92 percent on January 31st (based on parts of the country not currently on holiday). 

Nevertheless, around half of long-distance trains were running, the state railway company said.

Railway workers hold a banner as they protest against pension reform a general assembly of railway workers on the third day of nationwide rallies organised since the start of the year, against a deeply unpopul at Gare de Lyon train station in Paris on February 7, 2023. (Photo by Sameer Al-Doumy / AFP)

Another day of action is planned by unions on Saturday although with train unions calling for protests rather than strikes, disruption may be less severe. 

“It’s ok, it’s manageable,” Sylvain Magnan, a 23-year-old told AFP at the main station in the city of Marseille on the Mediterranean. “I just took a later train.”

Two unions representing rail workers, the CGT and Sud-Rail had also threatened renewable strike action from mid-February onwards. 

“I don’t feel that the guys are ready to go on a renewable strike at the moment”, train driver and member of the CGT chapter representing rail workers, CGT-Cheminots, Thierry Milbeo, told Le Parisien, referencing his fellow rail workers.

As for oil refineries, approximately one in two TotalEnergies workers were out on strike during the third round of walkouts, the company said, but stocks at petrol stations are sufficiently high to handle any temporary pause in deliveries.

The situation in French parliament

Macron’s proposals would bring France closer into line with its European neighbours, most of which have retirement ages of 65 or higher.

But the government has struggled to defend the overhaul as necessary or fair, given that the system is currently in balance and that low-skilled workers are said by many economists to bear the brunt of the changes.

“It’s reform or bankruptcy,” Public Accounts Minister Gabriel Attal said in parliament on Monday, leading to criticism from opponents that he was exaggerating.

French Junior Minister for Public Accounts Gabriel Attal delivers a speech during the debate regarding the draft law on pension system reform at the National Assembly in Paris, on February 6, 2023. (Photo by Ludovic MARIN / AFP)

Forecasts from the independent Pensions Advisory Council show the pensions system in deficit on average over the next 25 years.

The changes would lead to annual savings of around €18 billion by 2030 — mostly from pushing people to work for longer and abolishing some special retirement schemes.

France’s spending on pensions is the third highest among industrialised countries relative to the size of its economy. The country is number one in terms of overall public spending, according to data from the Organisation for Economic Co-operation and Development.

In parliament, the government will need to rely on the right-wing Republicans opposition party to pass the draft legislation, without having to resort to controversial executive powers that dispense with the need for a vote.

Macron’s allies are in a minority in the hung National Assembly after elections in June.

Prime Minister Elisabeth Borne on Sunday offered a key concession, saying people who started work aged 20 or 21 would be allowed to leave work a year earlier.

Republicans’ head Eric Ciotti has promised his backing, in theory giving the government the numbers it needs to pass the legislation.

But the left-wing opposition group and the far-right nationalist and Eurosceptic party of Marine Le Pen are staunchly opposed and have filed thousands of amendments.

Speaking in parliament on Monday, Le Pen said the government’s reform was “unfair” and “dictated by your desire to please the European Commission.”

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