April 17, 2018 / 3:17 PM / 8 days ago

French parliament approves rail reform on eve of new strike

PARIS (Reuters) - France’s lower house of parliament on Tuesday approved the biggest railway shake-up since nationalisation with a bill that will abolish the state monopoly, shrugging off fierce union opposition and rolling strikes.

A view shows several hundred train locomotives, passenger, and freight railway cars of different generations that are parked at a so-called "train cemetery" inside a marshalling yard in Sotteville-Les-Rouen, near Rouen, France, April 12, 2018. REUTERS/Philippe Wojazer

The approval vote in France’s National Assembly appeared to push one of President Emmanuel Macron’s flagship reforms beyond the point of no return, hours before yet another two-day train strike, the fourth since the start of April.

The showdown with rail unions, billed as the biggest test so far of Macron’s determination to see through a raft of economic reform, now turns into more of an endurance test for SNCF staff - there are 150,000 - whose pay is cut when they refuse to work.

Another vote is scheduled in the Senate, the upper house of parliament, in May before the process of parliamentary approval is completed, which should now happen by early July at the very latest, a transport ministry official said.

Hallmarks of the legislative reform, the biggest since nationalisation in 1937, include gradual phase-out of the SNCF’s passenger rail monopoly, starting with competition on high-speed lines in 2020, and an end to hiring of SNCF staff on more protective job-for-life contracts than in other sectors.

A third major strut of the reform will change the corporate structure into a joint-stock company. The government insists it will remain 100 percent state-owned but unions fear this opens the door to privatisation, as happened after similar changes to the corporate structure of France Telecom, now called Orange.

LAST GASP FOR UNIONS?

Macron has stood firm in the face of unions whose strike call - nationwide stoppages two days in every five days up to the end of June - has crippled services each time since it began on April 3.

Behind the united front on industrial action, unions have different objectives. The CGT and Sud-Rail unions oppose open competition while the CFDT and Unsa unions above all want the government to absorb 46 billion euros ($57 billion)of SNCF debt.

Macron said on Sunday that the state was ready to take over SNCF debt, mostly generated by investment in TGV high-speed lines. But he remained vague on how much - a stand unions have branded as insufficient.

What Macron and the rest of France will be watching now is the turnout and impact of this week’s strike on Wednesday and Thursday, and in the coming few weeks.

Opinion polls show a majority of French people are in favour of the reform, although various soundings have also showed voters want the government to take account of union demands.

($1 = 0.8097 euros)

Writing by Brian Love; Editing by Ingrid Melander and Richard Balmforth

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