Financial news

France: Strikes affect economic growth

French Finance Minister Le Maire, however, says it is far too early to quantify their overall impact on GDP

The rail workers’ rolling strikes, other social movements and industrial actions in France are beginning to have a negative toll on the economic growth, French Finance Minister Bruno Le Maire said on Monday.

“This is an impact that is limited, that we cannot measure today, but we already feel that it’s starting to have an impact in certain sectors… in hotel reservations, in transport, in tourism,” told Le Maire.

“And that’s why the sooner we can get out, the better,” he added.

Le Maire recalled the major strikes of late 1995 that had shaved 0.2 percentage points off the GDP back then, adding, however, that the economy overall was picking up at the moment.

“Today, it is much too early to assess what the consequences of these social movements could be,” he said.

France’s budget deficit has met the EU’s rule of keeping the deficits below the three percent of the GDP for the first time since the financial crisis of 2008, the country’s national statistics agency revealed last month.

The country’s public deficit dropped to a better-than-expected 2.6 percent of the GDP in 2017, better than the government’s target of 2.9 percent, and down from 3.4 percent in 2016.

A deficit under three percent of the GDP for another year would allow the eurozone’s second-biggest economy to exit the EU’s “excessive deficit procedure”.

France is facing a wave of strikes in several sectors, with state railway operator SNCF planning a total of 36 days of rolling strikes — which started on April 3 — over the next three months, to protest government reform plans.

Students, trash collectors, electricity and energy sector staff, and employees of Air France are among those taking part in what has been called the biggest wave of industrial unrest since President Emmanuel Macron’s election last May.

Seven main public sector trade unions called for a one-day strike on May 22 to protest Macron’s  plans to reform the eurozone’s second-largest economy.