Tensions in France are mounting. In a joint statement, seven unions called for a strike on 7 September, when Parliament starts debating the government pensions plan. Workers' representatives aim to gather private and public sector employees as well as retired people to protest against a measure which, in their view, would leave the burden of correcting France's fiscal position on workers' shoulders.

President Sarkozy's coalition has in fact announced the intention of raising the minimum retirement age from 60 to 62 years old and from 65 to 67 should workers want to retire with full entitlement. This move came as part of efforts made by the government to strengthen public accounts, which have deteriorated significantly during the latest recession. Incidentally, the Budget to be discussed includes some tax increases as well as more public savings (estimated in c.EUR10bn rather than EUR4bn as initially announced). Overall, the fiscal plan is expected to bring the budget deficit to 6% of GDP by 2011 (BarCap: 6.8% of GDP), from an expected 8% in 2010 (BarCap: 7.6%)

The announcement of fiscal reforms had contributed to a plunge in the government's popularity. Confidence in President Sarkozy has fallen to all-time lows of 34%. Moreover, a survey published by daily newspaper Liberation shows that 55% of voters want the left-wing to win the next presidential election in 2012.

As a final point, it should be noted that demonstrators already protested against pension reform on 24 June, with unions estimating their number at 2mn, although the Interior Ministry's official count was around 800k.

source: BarCap