French Unions want a 10 per cent minimum wage increase

By Adam Sage, The Times, 10 June 1997

LIONEL JOSPIN, the French Prime Minister, came under concerted pressure from his Communist allies yesterday to raise the minimum wage and shelve plans to modernise the financially troubled state transport sector.

The Communist action signals the difficulties facing M Jospin as he tries to find a path between the conflicting demands of French labour and his European partners.

His election win has spurred hopes of wage rises among workers frustrated by four years of austerity from centre-right Governments. But with 4.2 million people employed by the state sector, any wage rise would inflate the public deficit and make it more difficult for France to meet the criteria for economic and monetary union.

The need to appease Bonn's fears on a single currency without disappointing his left-wing electorate explains M Jospin's delay in setting a clear European policy.

Robert Hue, leader of the Communist Party, which has three ministers in M Jospin's Socialist-led Government, wants a 10 per cent rise in the minimum wage. That would take it from Fr 6,406 (674) a month to more than Fr 7,000 (737).

M Hue's call was echoed by Louis Viannet, head of the Communist-led General Works Confederation, which has the ability to paralyse France as in December 1995. Yesterday, he suggested that he was prepared to back wage demands with strike action.

Although M Jospin has diluted his campaign pledge to increase salaries, he is likely to accept Communist demands for a higher minimum wage. The markets worry how much that rise will be.

The Communist presence at the centre of public life was underlined when Jean-Claude Gayssot, 52, the Transport Minister, said he wanted to halt reform of the SNCF railway network which lost Fr15.2 billion last year, and the troubled state airline, Air France, which is seeking privatisation.