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Railway reforms. SNCF: the government reduces the debt in the hope of breaking the unions

Translated Tuesday 12 June 2018, by Philippa Griffin

On Friday 25 May, the Prime Minister Édouard Philippe estimated the cost of a partial state bail-out of the SNCF debt at €35bn. He attempted to draw a line under the dispute without making concessions on the other aspects of the proposed reforms, which were to have been discussed at the Senate on Tuesday 29 May.

After almost two months of strike action on the SNCF, the government finally appears ready to intervene. On Friday 25 May, Édouard Philippe, the French Prime Minister, announced that he was prepared to instigate a state-funded partial bail-out of the publicly-owned railway system. His plan is to clear €35bn of the SNCF’s €54.5bn debt in two instalments: €25bn in 2020, then the remaining €10bn in 2022.

The announcement was immediately hailed as “a historic development” by the CEO of the railway network, Guillaume Pepy, who predicts that “the new SNCF will be financially stable as of 2020”, and that “we are on the cusp of a sustainable funding settlement”. Philippe has, moreover, committed to increase public investment in the SNCF by €200m per year, exceeding the predicted total of €3.6bn - €3.8bn.

To try to introduce rifts in the joint unions of railway employees, the government has opened discussions with the grassroots of UNSA (National Union of Independent Trade Unions) and the CFDT (the French Democratic Union of Labour). It has also promised to incorporate certain proposals from the unions – in particular, the issue of non-transferability of job titles, and the return conditions for SNCF employees who have been seconded or transferred to other employers. These proposals will be presented to the Senate as of Tuesday 29 May.

“We must not drop our guard”

However, although the unions might appreciate the government’s current trend of thought, they remain divided and do not appear to be ready to join the negotiating table. On Saturday 27 May, the SNCF division of UNSA emphasised in a leaflet that “we must not drop our guard”, clearly belying the apparent desire to “move beyond the union movement”. Despite recognising that certain individuals have received "encouraging signs" from Edouard Philippe, the unions nonetheless called railway employees to join the next phase of strike action from 27th to 30th May, and to take part in a demonstration at the Senate on Tuesday 29 May. UNSA writes that “upon the release of the proposals by the Senate, the degree to which our requests have been accepted, and the likely next steps in the conflict, will be evaluated. We will continue to exert pressure on the government until an acceptable deal is reached.” Laurent Berger, General Secretary of the CFDT, explained in an interview in the Journal du Dimanche (Sunday newspaper) that “the CFDT does not wish to reduce this pressure”, and confirmed that his union will not cease strike action until their demands are formally incorporated into law on 13th June.

“These announcements are obviously intended to lend weight to the government’s position, in particular their decision to shoulder a substantial part of the current debt, and the fact that they have organised a round table meeting in early June. They reflect the government’s “long game” approach to negotiations », explained the CGT (French General Confederation of Labour), nonetheless highlighting that “there remains a long way to go before the demands of the railway employees are met.” Laurent Brun, the General Secretary, believes that “in summary, we have a government that appears on the surface to be reasonably open to negotiation, but which in reality remains reluctant to engage. The fight continues, and the marshaling of our collective forces has never been more important”. Erik Meyer, spokesperson for SUD Rail (“Solidaire, Unitaire, Democratique”), believes, in a similar vein, that the Prime Minister’s promises are not “sufficient to stop strike action”.

Given that the state intends to shoulder a good part of the debt, Philippe still intends to impose productivity targets upon railway workers. He confirmed that “there will be no SNCF tax” to fund the debt relief, which will “has just been added to the public deficit”. He estimates, however, that the productivity of SNCF is 30% less than its competitors, and insists that “by 2026, this productivity gap must be reduced by two-thirds”.

All trade unions, however, have insisted upon a three-way meeting between the government, branch managers and unions to bring to the table all aspects of railway reform. As Philippe has since announced that the Transport Minister Elisabeth Borne has only 15 days to assemble the unions and the managers of the UTP (Unions of Public and Railway Transport), it appears that the prime minister wishes to limit discussions to the future collective bargaining agreement of the railway system.

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