Accoce Jean-Vincent ADEK member Mail : [email protected]

Reactions to the crises of European economic integration: country study: France Paper for the 10th Workshop of the R.N.A.P: —Macroeconomics and Macroeconomics Policies. Alternatives to the orthodoxy“ Berlin, Germany

Abstract

According to European analysts, the negative vote to the treaty establishing a constitution for the proved that France is locked up in its social model . Necessary labour market reforms seem to be impossible because of powerful trade unions. The recent reject of the CPE (new work contract supposed to facilitate the entrance of young workers on the market) is a typical illustration of this vision shared by French and European politics. Before hostile reactions of trade unions towards this contract, a survey (CSA: 28 of January 2006) revealed that 52% of were favourable to the instauration of this contract. After trade union mobilizations and student strikes, surveys showed a trend reversal (Ipsos, 25 of March 2006: 63% of French people against the instauration of the CPE), highlighting the massive reject of this new contract in the French society. This example could let us think that French trade unions, which are not very representative of workers, are able to prevent governments from reforming. Is it true? Can we find the origins of French social sclerosis in trade unions? In my paper, I will show that this very popular vision is wrong. Trough the example of two recent modifications of the labour legislation (the reduction of labour time known as the 35 hours reform and the instauration of a new work contract, the CNE), I will underline the key role of trade unions in the success of labour market reforms.

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(1) Introduction

The French reject of the treaty establishing a constitution for Europe (TECE), in May the 29, 2005, was a thunderstruck. Many of French politicians, especially those who campaigned for the instauration of the treaty, perceived this vote as a —divorce“ between French and politic. Obviously, the famous French social fracture (Trademark and determinant leitmotiv of in Presidential 1995) has never been so present than after this vote. One year after, a survey (AFP) concludes that 98% of French who voted no would make the same vote (this survey also concludes that 10% of people who voted yes regret it and that the no would gather 58% of French) 1. This situation proves that, contrary to what some said after the referendum, the reject of the treaty wasn‘t circumstantial. It wasn‘t only the expression of a sanction against Jean-Pierre Raffarin‘s government. Likewise, despite of nationalists‘ analyses, this vote wasn‘t a rejection of European institutions. Most of French who rejected the TECE admitted afterwards that they believe in the European Union and in its actions. It appears that French rejected the TECE because of its consequences on the European and national institutions. Fruit of a consensus between all European countries, this treaty strangely gave a key role to markets in order to regulate the European Union. This consensus is strange because, historically, the E.U. was built thanks to strong European governments interventions. It seems that the consensus around the part III of the TECE was inspired by the English economic success. Still, in France, this consensus triggered lots of reactions during the campaign and finally brought French to reject the whole treaty 2. Why this reaction in a country which never knew a real liberal experience? Two types of answer can be found.

First, we can explain it by the fear to lose the leadership in the E.U. Entrances of new countries in the Union and instauration of liberalism can obviously have consequences on the balance of powers between European states. France was, with Germany, at the origin of the European Union, but can lose its leadership in a Union where, finally, only markets matter. Second, and more fundamentally, it seems that French are more and more frightened by the so-called ultra liberal society. This society was promised by the third part of the TECE. One could say that this behaviour is amazing. Actually, no real experiences of liberalism have ever been initiated in France. Culturally, State always played a key part in the regulation of economy. This behaviour, based on the idea of intergenerational and interclass solidarity, built the famous French social model . Constitutionality of competition, supposed by the treaty, was perceived by French as a threat for this model. The referendum was an occasion for French to prove their attachment to this social model and to claim that another Europe should be considered. Abroad, this attachment is perceived as the expression of the immobility of French institutions. Even in France, some politicians underline that France can‘t be governed and above all can‘t be reformed. They also explain that the French social model , cherished by French, is sclerosed because of the action of powerful trade unions. Their actions would forbid all types of reform, especially on the labour market. Actually, the negative vote to the TECE is partly due to the trade unions mobilization. They thought that the third part of the

1 AFP Mai (2006) 2 A survey (TNS, SOFRES) concludes that motivations of 57% of people who voted no were unemployment consequences of the Treaty in Direction Générale —Presse et communiquation“ de la commission européenne. (2006): la constitution européenne : sondage post-référendum en France.

2 treaty was an attempt of global reform of the European labour market in general and particularly of the French one. Objectively, we can feel a disease each time a government want to reform the national labour market. Recently, trade unions helped students in their mobilization against the CPE ( Contrat première embauche literally first job contract). This new labour contract, dedicated to young people under 26, was supposed to facilitate their integration on the labour market. In fact, it was an attempt to make this segment of the market more flexible. Trade unions mobilization was strong and their support to students‘ strikes was crucial in the CPE retreat. In the light of this event, French people could actually ask themselves if their country can be governed. Everybody in France feels the need of important reforms but it seems impossible for a government (no matter if they are liberal or not) to initiate a reform without provoking strong reactions from trade unions. Lots of French politicians relay this idea making French feel guilty for their support to their trade unions. But the problem isn‘t as simple. The aim of this paper is to prove that it‘s because of the weakness of trade unions that France can‘t be governed. In the light of two major examples of labour market reforms, reduction of the official labour time (known as the 35 hours reform ) and introduction of a new labour contract (CNE , contrat nouvelles embauches), I will emphasize that conditions of success of a reform depends on the trade unions‘ involvement in its elaboration.

In the first part of this paper, I will briefly present the two envisaged reforms. I will emphasize their goal and their result. In the second part of this paper, I will explain conditions of the establishment of these two reforms. And in the last part, I will propose some reforms to facilitate the success of labour market reforms in France. More generally, this last part will deal with transmission of economic policy to the French economy. In the light of the political content of these two reforms, I would like to emphasize that I won‘t discuss in this paper the efficiency or supposed efficiency of the envisaged reforms on employment. I will only deal with their success in the light of their objective.

(2) Reforming the labour market in France, two attempts: 35 hours and CNE

Even if lots of analysts consider that the French labour market is rigid, we must recognize that employment legislation ( code du travail ) has been reformed several times these last ten years. Two major reforms had been adopted by the parliament: the reduction of the official labour time ( 35 hours reform ) and the instauration of a flexible labour contract available in firms which less than 20 employees (CNE). Did these reforms reach their goal? I will briefly define the two envisaged reforms and discuss their success in the light of the objectives announced before their instauration.

(2.1) 35 hours: definition, objective and results

The 35 hours reform has been adopted by the in June 1998. This modification of the official labour time, from 39 hours to 35 hours a week, was one of the electoral promises of the Parti Socialiste during the parliamentary election of 1997. Once invested, the socialist leader and new Prime Minister, , charged one of his ministers, Martine Aubry, to launch this important project. The aim of this reform was obviously ambitious: reduce the official labour time in all enterprises, around 320 000, in three years. To reach that goal, parliament (and plural majority) adopted two different laws, known as Aubry 1 and Aubry 2.

3 The first law, Aubry 1, adopted in June 1998, was dedicated to enterprises which had more than 20 employees. This law gave employers till January 2000 to negotiate modalities of labour time reduction ( RTT : réduction du temps de travail ) with their employees. The second law, Aubry 2, adopted in January 2000, was dedicated to enterprises with less than 20 people. This law gave employers two years to reduce the weekly labour time form 39 to 35 hours. As we can see, the —dead line“ for the reduction of the official labour time was in January 2002. One year after this date, what was the situation? Did these two laws manage to reach their goals? As we can see in the table 1, results are full of nuances.

Table 1 : rate of transition to 35 hours a week in June 2003 (%)

Regarding the size of the firm Regarding the sector Size of the firm Employees Firms Sector Employees Firms less than 10 Agriculture people 20,9 17,4 54,6 48,9 Between 10 Industry and 20 29,8 29,9 72,9 28,2 Construction Less than 50 49,2 49,2 38,9 22,1 Between 50 Trade and and 200 63,5 60,7 services 55,3 18,4 200 and More 84,6 81,7 Total 58,4 20,5 Total 58,4 20,5 Less than 20 23,3 18,2 More than 20 73,9 55,2 Source: URSAFF (2005)

As we can see, in 2003, only 58% of employees worked 35 hours a week in 2003 and only 20% of the firms enforced the law. This balance seems to prove that even if the will to reform the labour market was evident, French society didn‘t follow its political leaders in their action. Still, if we look carefully the table 1, we can guess a correlation between the size of the firms and the transition to —35 hours a week“. Actually, less than 20% of the firms with less than 20 people managed to fit their structures to the exigencies of Aubry 2. Conversely, 74% of the firms with more than 20 people managed to negotiate the transition to the 35 hours a week. We can of course explain this situation by the fragility of small firms which can‘t afford to fit quickly their structures to Aubry 2. Table 1 shows that few firms with less than 10 people managed to obey to the law (17%). We can actually understand the difficulty of these firms, which generally have an average life expectancy of less than 5 years, to change their structure when most of their employees worked more than the previous official labour time (39 hours a week). Trade unions aren‘t present in these firms and employment legislation is often a concept. At the opposite, firms with more than 20 people managed the transition. 74% of them adopted the rhythm established by Aubry 1 (with a peak at 84% for the firms with more than 200 people). I will underline in the second part of this paper the reasons of this success. Still, as Hervé Derfalvard and Martine Lurol 3 noticed, this success is partly due to the presence of

3 Derfalvard H., Lurol M., Polzhuber E. (2004), Accords 35 heures: genre et statut , Report to the DARES. Available on www.travail.gouv.fr

4 trade unions in the negotiations. Their action in the negotiations facilitated the instauration of the law in the firms with more than 20 people. To conclude, we can‘t really say the 35 hours reform is a success. The two laws inscribed in the reform emphasised the difficulties to change small firms‘ environment and the power of trade unions in the firms with more than 20 people.

(2.2) CNE: definition, objective and results

Changing the small firms‘ environment, this was the aim of the instauration of the CNE. I underlined in the introduction of the present paper that the reject of the TECE was a thunderstruck in the French political life. After this vote, French Prime Minister Jean-Pierre Raffarin was dismissed, and President Chirac named Dominique De Villepin. The ambition of the new Prime Minister was great: as admirer of , Dominique De Villepin wanted to give French confidence in 100 days . In order to reach this goal, he decided to target unemployment as —enemy number one“ of his government. Actually, unemployment, since several years, became the main preoccupation of French and is still at the origin of lots of social troubles. To fight unemployment, Mister De Villepin planned to make the French labour market more flexible and targeted his actions to change the environment of small firms (with 20 people). What was his action? In August 2005, De Villepin‘s government announced, by decree (no vote from the parliament) 4 the creation of a new labour contract (CNE) dedicated to firms with less than 20 people. According to this contract: —during a two-year period, called ”consolidation‘ period, the labour contract can be break off easily. During this period, this breaking off doesn‘t have to be motivated when employer is at its origin and employee can dismiss whenever he wants without notice“. 5 After this period, the CNE become a CDI (contract without determined end). This contract is supposed to facilitate the employment in small firms, especially when they have to face difficulties. The hope, for employees, of a transformation into a CDI was emphasised by the government. Objective of this reform have never been announced, but we guess that the aim of the instauration of this new contract was to substitute, during two years, this contract to the traditional and rigid labour contract: French CDI. In the light of a recent report from the DARES ( Direction de l‘animation et de la recherché des études et des statistiques ), what are the results of the instauration of this contract? This report 6 concludes that more than 400 000 CNE have be signed from August 2005 to July 2006, which proves that this contract is a great success. Actually, it represented 12% of labour contracts in July 2006. Lots of analysts said that this new contract was at the origin of the unemployment drop during the last summer. Still, if we consider the tables 2 and graph 1, we can hardly be so positive.

4 Décret n°2005-893 published in the Journal Officiel (3/08/2005) 5 DARES (2006) : première synthèse d‘informations : le contrat nouvelles embauches , (Paris : DARES) 6 DARES (2006), op. Cit.

5 Table 2: figures about CNE

% in total of % in total of % in total of CDD > 1 CNE CDI month Sector Industry 11 11 10 Construction 18 20 15 Tertiar 71 69 75 % in total of % in total % in total of CDD>1 of CNE CDI month Size of the firm 0-4 employees 45 42 43 5-9 employees 32 38 35 10-19 employees 23 20 22 Source: DARES (2006)

Graph 1: Index of stays in the firm (Base 100 in September 2005)

120 100 CDD more than 1month 80 CNE 60 40 CDI 20 0

H 3 3 3 3 2 3 i 1 0 1 1 8 1 r in o n d j f m a e g c o e n t v c b a o u r r e e u c b m m a e r a h r b b y r y 2 2 e e 0 0 r r 0 0 2 2 6 5 0 0 0 0 5 5

Source: DARES (2006)

Contrary to what government says the CNE doesn‘t really have specificities if we compare it to the two traditional labour contracts (CDI and CDD>1 month). As we see, the use of the CNE isn‘t systematic in firms with less than 20 people. The report of the DARES emphasizes that if they have the choice; employers prefer to propose a CDI to their employees 7. Generally, employers use equally the three labour contracts. Graph 1 shows that finally one of the aims of the CNE isn‘t reach a year after its instauration: 35% of people who signed a CNE in September 2005 are not employed in the firm anymore in April 2006. This rate is very important if we compare it to the CDI (less than 20% for the same period). Even if it‘s a bit early to conclude to the failure of this contract to establish new types of behaviours in employment, we can say that this rate is worrying.

7 DARES (2006), op. Cit. Page 9

6 Weakness of trade unions in these firms mixed to the development of such a contract is an open gate to lots of abuse of power (employers can break off the contract whenever they want). The thing is more and more worrying when we know that, according to the DARES 8, 70% of employers, who use the CNE, specially chose it because they want to facilitate their redundancies. To sum up, we can say that the CNE is a success but failed to reform the labour market: entrepreneurs prefer to use traditional contracts to attract workers. This trend can be explained by the rigidity of such a contract as we will see the next part of this paper.

In the light of these two examples, we‘re tempted to say that those who claim that France can be governed are right. These two major attempts to reform the French labour market failed to reach their goal. But contrary to what some politicians think, these failures are not due to trade unions.

(3) Condition of elaboration of the envisaged reforms

In the light of the previous section, one could ask: if French feel the necessity to reform their labour market, why do they refuse ambitious reforms? Especially why firms with less than 20 people, which are supposed to be less rigid than bigger ones, are the last to accept reforms? In order to answer to these questions, I will present in this section modalities of elaboration of the two considered reforms.

(3.1) 35 hours: —flexibility in rigidity“, the key role of multilateral negotiation

Before becoming a —constraint“, according to the French union of employers (Medef), the 35 hours reform was a socialist electoral promise. After parliamentary elections, this promise became a bill and entailed a vote at the parliament. Thus, we can say that lots of negotiations occurred before its application. This is a strange paradox: even if this law forces firms to reduce labour time, the 35 hours reform is the fruit of many consensuses. This characteristic is associated to the reform, especially in its application. As Hervé Derfalvard and Martine Lurol remarked the application of the 35 hours reform was a real experiment of negotiated rights in firms 9. Actually, the application of this law was an occasion offered both to employers and employees to negotiate the way they could fit their specific firm‘s structure to a global reform. This specificity could explain why the reform reached its goals in firms with more than 20 people and failed in firms with less than 20 people. According to the authors, trade unions played a key role in the negotiation and allowed an agreement with employers in firms with more than 20 people. Conversely, still according to the authors, lacks of trade unions culture in firms with less than 20 people can explain the failure of this reform for them. In these firms, no union representatives were able to negotiate with employers. Authors

8 DARES (2006), op. Cit. Page 6 9 Delfalvard H., Lurol M., op. cit.

7 emphasizes that in lots of small firms, the employees‘ negotiator was often a negotiator by default . That‘s could explain why, in lots of cases, agreements were impossible. As we can see on the graph 2, firms with less than 20 people often waited till the dead line to find an agreement, which shows the difficulty to negotiate. At the opposite, in firms with more than 20 people, whenever trade unions were involved in the negotiation, the agreement was rapidly found.

Graph 2: Cumulative flow of firms which work 35 hours a week (1/06/1998-30/06/2003)

Aubry 2

271 658

55 572

Source : Defalvard H., Lurol M., Polzhuber E., (2004): Accords sur les 35 heures : genre et statut , (Paris : DARES)

It appears that the intervention of trade unions in firms with more than 20 employees facilitated the instauration of the reform. Negotiations were often tied but led to agreements in lots of these firms. At the opposite, whenever trade unions weren‘t involved in negotiations (firms with less than 20 employees), agreements were hard to find. We can see on the Graph 2 that small firms fit their structures to the 35 hours reform exigencies only when they were forced to. We can see that lots of these firms made the transition to 35 hours a week between the 1 st of January 2002 and March 2002, which shows that they waited for the dead line imposed by the law Aubry 2.

The role of trade unions is obvious in the success of the reform in firms with more than 20 people. Rare are the occasions in France where trade unions and employers negotiated at the enterprise level . These negotiations were facilitated by the union representation in these firms (cf. table 3). At the opposite, lack of this kind of negotiation in firms with less than 20 people (conditions of the transition where often chosen by employers) can explain why this reform didn‘t work for them.

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(3.2) CNE: —rigidity in flexibility: no negotiation

In August 2005, the CNE was presented as a new kind of labour contract. Considering the urgency of results in his struggle against unemployment, De Villepin‘s government decided to avoid the traditional parliamentary path and turned the CNE into an . This birth certificate symbolizes the way the CNE enters in firms. Dedicated to firms with less than 20 people, the CNE gives to employer lots of powers. For some trade unions, the introduction of the CNE is an attack to the French labour legislation 10 . In the traditional labour legislation, employers and employees have rights but also duties and one of the main employer‘s duties is to justify the dismissal of his employee. This duty vanishes in the CNE. As we saw in the previous section, the CNE is a success: lots of these contracts were signed between August 2005 and July 2006. Of course, one could remark that, finally, employees in a context of unemployment don‘t really have the choice of the type of their contract when they find a job. One could also notice that only firms with less than 10 people use this kind of contract, that breaking off of these contracts are often abrupt, even for employers… Objectively this contract has some inner limits which should be taken into account. Recently, some analysts from the , emphasised that the new flexibility, linked to the introduction of this contract, was elaborated without negotiation. One year after trade unions reactions, the Opposition realises that the introduction of this contract was an attack to the French Social Model . Charmed by the success of flexibility, in terms of employment, in England, several French politicians are more and more tempted to change this model and to give flexibility a key role in the regulation of the labour market.

I underlined that the introduction of this contract is very authoritarian: absent from the electoral program of the UMP (De Villepin‘s party), no debate in Parliament, no negotiation with trade unions. These characteristics show that government is on the verge to introduce a new kind of regulation to fight unemployment and new kind of governance in politics. First, Prime Minister De Villepin wants to facilitate hiring and dismissal, which are complicated by the French legislation. This reform was desired by lots of employers even if the problem of job security is obvious in this contract. Second and fundamentally, actual government tests a new kind of regulation with this new contract. Historically, trade unions have always been consulted to reform the labour legislation. This time, they were excluded from the elaboration of the CNE. The government wanted to convince employers and only employers that the CNE was efficient to answer their preoccupations. The bet was risky but Dominique De Villepin wanted to introduce a debate around the CNE after its introduction. He wanted to have negotiations with trade unions and employers‘ association, at the moment of the evaluation of the success of this contract: in July 2006. —No negotiation for the CNE“ 11 : this is the answer from the employers‘ association, Florence Parisot, when Gérard Larcher (Minister of employment) called for negotiation. As we see, problems inscribed in the CNE are not on the verge to be solved.

10 Lots of trade unions (CGT, FO) disputed the constitutionality of the CNE at the Conseil d‘Etat. 11 Express 30/06/06

9 (4) Condition of success of reforms in France

Results of the envisaged reforms in this paper show one thing: it‘s actually difficult to govern France. I reported in this paper two different kinds of regulation: the 35 hours reform which was based on negotiation and CNE which was arbitrarily decided by the government. These two experiences shed a light on the French weak point: transmission of policy to entrepreneurial word. Actually, none of these reforms managed to change the environment of small firms (core of activity in France). The failure 35 hours to change structures of firms with less than 20 people was obvious, but the CNE wasn‘t accepted as a standard contract in firms with less than 10 people. Even if we could discuss the relevance of the two envisaged reforms, my purpose is only to underline French institutional factors which prevent reforms. We saw in this paper that trade unions could be the key of success for an ambitious reform. What‘s their situation? How could we envisage their role in small firms?

(4.1) Place of trade unions in France

Trade unions in France are supposed to be very powerful. Everyone in France remembers strikes of 1995 which provoked the dismissal of the Prime Minister, Alain Juppé, when he and his government decided to reform the system of retirement pensions. It was clear that this dismissal was a direct consequence of union mobilization (more than 5 million people on strike in 1995) Still, lots of report underlines that unions are less and less representative of workers. In 2004, a report from the DARES 12 emphasized that less than 8% of workers belonged to a trade union. This figure gives to France one of the last places of European countries as regards of their rate of workers belonging to a trade union (c.f. table 3).

Table 3: rate of belonging to a trade union in some European Countries and in the USA (% of their working population) in 2005

January 2005 1. Denmark 87,5 2. Sweden 82 3. Finland 79 4.Belgium 69 5. Italy 55 6. UK 30 7. Germany 28 8. Netherlands 27 9. USA 17 10. France 8

Source: DARES (2004)

8% of the working population belonging to a trade union, one could easily understand the strategy of Prime Minister De Villepin when he attempt to exclude trade unions from the elaboration of the CNE. Still, as a report from the OECD remarked in 2004 13 , even if

12 DARES (2004), Mythes et réalités de la syndicalisation en France , N° 44. 3, Octobre. 13 OECD (2004) : Perspectives de l‘emploi de l‘OCDE (Paris : OCDE Press)

10 representativeness of trade unions is weak, their power remains. This report emphasized that the cover rate of collective agreements, which results from a negotiation between trade unions and employers‘ association, in 2004, reached 90%. This figure proves the power of trade unions which manage to enforce these agreements despite of the weakness of their representativeness. Comparing to other countries, we can actually note the power of French trade union (Graph 3).

Graph 3: Trade union representativeness and respect of collective agreements in the world in 2004 (%)

Respect of 100 collective 90 agreements France 80 Spain 70 Netherlands 60 USA 50 South Korea 40 Danemark 30 Finland 20 Sweden 10 Japan 0 0 20 40 60 80 100

Workers unionized

Source: OECD (2004)

Graph 3 shows that French unions are as powerful as Danish or Swedish ones. Still, government, which would like to apply the Danish model to France, feels less and less disposed to deal with trade unions to reform the labour market. Government and politicians like to remind that they only represent 8% of the working population and the more —protected“ segment of this population. Actually, report from the DARES underlined, in 2004, that 56% of French workers who belonged to trade unions were employed in the Public sector 14 . It also emphasized that most of —Unionised“ workers from the Private sector were employed in firms with more than 200 people. We can note that finally, the weak of representativeness of trade unions is due to their absence from firms with less than 20 people. We can explain this fact by the French legislation which doesn‘t force firm with 10 people to have a union representative. The problem is that these firms are the core of the French — entrepreunariat “. As we saw in the previous section, they can turn a reform into a success if they accept it generally turn it into a failure.

14 DARES (2004) op. Cit.

11 (4.2) The necessity of a reform: a new kind of negotiation

Trade unions are under-represented in small firms in France. This fact is really hard to explain. Of course, French legislation doesn‘t force employers of firms with less than 10 people to have a union representative, but some studies 15 prove there is a real disinterest for unionism in France. As I previously underlined, studies realised to analyse the ways the —35 hours reform“ was negotiated in small firms, showed that employees negotiators were negotiators by default . In other words, they didn‘t really have a unionist culture. Lots of arguments can explain this disinterest for unionism, but an original one can be given by sociologists. According to some of them, this one could be a consequence of what some sociologists call the fragmentation 16 of the French society. According to their arguments, French society passed from a structure of economic class to a structure of symbolic belonging 17 . The multiplication of symbolic belongings would prevent the affirmation of a real —class conscious“ and would prevent any collective action. This analyse seems to be confirmed by the reality.

During the period 1968-2000, trade unions lost each year more and more members. This trend can be explained by the privatization and the breaking up of big national firms (for example, la Générale des eaux which became Vivendi) but also by the collapse of a production process which relied on huge unity of production. Nowadays, unionism in France is merely present in large firms and in national ones where employees can meet around common positions. The task of Trade unions is to convince workers of other type of firms to join them. We saw that these last years, they failed in this mission.

I assume that the consequence of this situation is the radicalization of their stance. It‘s this radicalization which gives the impression of sclerosis in the French Social Model. To illustrate this assumption, I would like to shed a light on the situation of two trade unions: CFDT (Confédération française démocratique du travail ) and CGT ( Confédération générale du travail ). These two trade unions adopted during the 90‘s and the beginning of the new century two different behaviours. The first one, CFDT , adopted what I could call an —accommodating“ stance. This trade union was ready to negotiate each time a reform was proposed. For example, in 1995, when Prime Minister Alain Juppé proposed a reform of the retirement system (traditionally based on repartition), the CFDT was the only trade union who negotiated with the government. The reform finally failed and provoked the dismissal of Alain Juppé but this situation happened once again in 2003 when Prime Minister Jean-Pierre Raffarin initiated the same reform. Again, the CFDT was the only trade union to join the negotiating table and made the reform possible. Consequences on their strength were important. If the CFDT didn‘t really suffer from the first reform attempt, it did form the success of the second (see table 4).

Table 4: members of CFDT from 1988 to 2005 (in thousands)

1988 1998 2000 2003 2005 Members 536 757 831 873 807 Source: CFDT (2006)

15 Labbé, D. (1996): syndicat et syndiqués en France depuis 1945 (Paris : l‘Harmattan) 16 For more details see Pakulski, Waters (1996): The death of class (London: Sage) or Robert Nisbet (1959): the decline and fall of social class, Pacifical Sociological review, 2(1), pp 119-129. 17 Chauvel L. (2001) : Le retour des classes sociales ?, revue de l‘OFCE n°79.

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At the opposite, the CGT adopted a very different stance. About the same reforms, CGT systematically refused to negotiate with government. One could understand their position because it was obvious that the two governments I mentioned proposed negotiations with trade unions but didn‘t stop the legislative process during these ones. If lots of analysts and politicians emphasized that this position was the expression of the French social —sclerosis“, this behaviour convinced plenty other trade unions (for example FO, Force Ouvriére) . One could think that the generalisation of what we can call a —break up behaviour“ is at the origin of the new kind of regulation (or governance) initiated with the introduction of the CNE. It might be possible that the government, because of the behaviour of these trade unions, preferred to launch the reform without any negotiation than to face a non-negotiation.

Contrary to CFDT , members of CGT increased after 2003.

Table 5: members of CGT from 1948 to 2005 (in thousands)

1948 1958 1968 1975 1997 2005 Members 4 000 1 625 2 300 2 377 634 711 Source: CGT (2006)

Of course one could observe than compared to the CFDT, CGT lost lots of members since 1948 and that an historical reverse happened in the 90‘ when CGT became less important (in terms of memberships) than the CFDT. But, in the last professional elections, CGT was the first French trade union (32% of employees voted for CGT) which supposes that most of employees who voted for these elections approved their —break up behaviour“. As we can see France must face a double problem: first, unionism collapses since the beginning of the 80‘. Then, unionism since the middle of the 90‘ involves a radicalization in the negotiations with government. This situation is problematic and should question both politicians and unionist leaders. As the two examples of reforms mentioned seem to prove, trade unions have to play a key in the transmission of economic policy. Specially, they should play a key role in the firms with less than 20 people. Is there any solution to the French Social sclerosis ? Some politicians (Ségolène Royal for the Parti socialiste) proposed the obligation of unionism for all workers. This solution would imply the introduction of democracy in the labour relationships. Obligation of unionism would certainly make the trade unions positions less radical and would certainly enforce governments to negotiate (trade unions would be very representative) to reform the French social model. Still a question remains and specificity of French society could make such a reform inefficient. Is the French Society ready for such an —obligation“? Last presidential election (2002) spotlighted the weakness of the French Democracy. For the first round of this election, only 70% of electors went to the polls. One could ask a simple question: if French citizens show the same interest for elections of trade unions than they showed for this election, what would be the effect of such an —obligation“?

13 (5) Conclusion

This paper tried to underline that trade unions are not responsible of the sclerosis of the French social model. Through two examples, I tried to underline that if labour market reforms failed, it wasn‘t because of the reaction of trade unions but it was obviously due to the difficulty to accept a reform in small firms (in where trade unions are absent). The 35 hours reform is exemplary: a new labour legislation supposed to be accepted by all from the moment government and trade unions found an agreement and which was finally very hard to apply in small firms. We can guess the importance of the problem. Firms with less than 20 people represent the core of the French activity and they are the less —touched“ by the reforms. As we saw through the examples of the —35 hours“ and the CNE, it‘s not really a problem of flexibility but certainly a problem of behaviour. Politicians have more and more difficulties to modify entrepreneurs‘ environment and so to modify their expectations (good expectations are conditions of employment). The actual government tried to modify their administrative environment. With the CNE, government wanted to convince them that the hiring of an employee wasn‘t definitive. This new environment was supposed to have direct consequences on the structure of costs of —small“ firms. Still, government failed. Employers, excepting in some sectors like construction (where precariousness rules), didn‘t really use the CNE. This behaviour shows that decisions of entrepreneurs are more complicate than government (and lots of economists) believed. As we saw, the survey from the DARES18 emphasised that employers take the will of employees into account when they propose a labour contract. Employees are supposed to refuse precariousness, so they don‘t propose the CNE. The situation would certainly be easier if trade unions could negotiate conditions of application of the CNE in the particular environment of small firms.

Example of France is interesting. Sclerosis of French society shed a light on the necessity to take into account channels of transmission of economic policies. In the case of France, involvement of trade unions should be more important to avoid a definitive collapse of the social model.

18 DARES (2006), op. Cit.

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