France's Philippe Offers to Ease Rail Co. Debts in Strike Talks

(Bloomberg) -- Prime Minister Edouard Philippe said the French state is ready to take on a part of national rail operator's mountainous debts if workers accept government plans to open the market to competition.

Philippe said the government is ready to reduce SNCF's debts of as much as 50 billion euros ($61 billion) to help the company compete with private operators once its reforms come into effect. He said talks with labor unions are ongoing and their strike may resume on Sunday.

“The government will bring answers to the extent that the company brings its own answers,” Philippe said in an interview on France Inter radio. “Opening telecoms to competition hasn't been a bad thing for the country, I believe rail could follow the same path.”

An Elabe poll released Wednesday showed increasing support for the strikers that brought trains to a near standstill this week. Forty-four percent of respondents backed the industrial action, up from 38 percent two weeks earlier. Still, more than 60 percent said the government is right to revoke some of the workers' privileges.

Philippe renewed the pledge to overhaul swathes of the French economy with unions planning to continue industrial action on the rail network through June. Changes at SNCF will deny future hires the job security, early retirement and special pensions of existing workers while opening lines up to competition.

Students, Air France

SNCF freight services have also been hit, delaying deliveries of products. France's wheat producers chief Philippe Pinta told Agence France-Presse there were “worries” in the sector that some orders couldn't be fulfilled and that the cost per ton would increase.

The strike at the railway service SNCF started this week and the next stoppage is scheduled for Sunday and Monday. Unions including Sud Rail indicated Thursday they are maintaining the walk-out.

The four main rail workers' unions will meet Thursday afternoon with Transport Ministry officials to discuss debt, SNCF funding and the benefits for the workforce. Thierry Nier, deputy leader of the CGT union, said Wednesday on France Info radio that the agenda for the session is “positive.”

Protest at the railway operator comes as several university campuses including Paris's Sorbonne university are blockaded by students protesting a plan to make applications more selective. The PM blamed far-left and far-right students groups seeking to make the protest “violent.” Universities in Paris, Montpellier, Toulouse, and Nice were among about 10 sites affected by protests.

Air France unions have called industrial action for seven days between April 7 and April 24 in an unrelated pay dispute while garbage collectors in the Paris region are also on strike.

To contact the reporter on this story: Helene Fouquet in Paris at hfouquet1@bloomberg.net.

To contact the editors responsible for this story: Alan Crawford at acrawford6@bloomberg.net, Ben Sills, Caroline Alexander

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