France's Macron locked in an 'existential battle' against trade unions, strategist says

  • Ahead of his first anniversary as France's premier, Macron is facing rolling strikes by rail workers over a shake-up of the debt-ridden state-owned SNCF, student protests over higher education reform and escalating levels of discontent among pensioners over higher social security charges.
  • "I think there has never been such a fertile environment for reform. Macron knows this and I think trade unions know this," Antonio Barroso, managing director of Teneo Intelligence, told CNBC's "Squawk Box Europe" on Wednesday.

French President Emmanuel Macron could soon see his hopes of flagship labor market reforms derailed by trade union protests, according to one political strategist.

Ahead of his first anniversary as France's premier, Macron is facing rolling strikes by rail workers over a shake-up of the debt-ridden state-owned SNCF, student protests over higher education reform and escalating levels of discontent among pensioners over higher social security charges.

"I think there has never been such a fertile environment for reform. Macron knows this and I think trade unions know this," Antonio Barroso, managing director of Teneo Intelligence, told CNBC's "Squawk Box Europe" on Wednesday.

"In isolation, (trade union) actions do not create a considerable risk for Macron. Rather, the main problem would be the coalescence of different protests into a bigger movement against his policies, thus undermining his political capital to pass reforms in other areas such as pensions," he added.

'Litmus test for Macron'

On Tuesday, seven main public sector trade unions called for a one-day strike in May, broadening the scope of the dispute over Macron's plans to reform the euro zone's second-biggest economy.

Should the strikes go ahead, it would mark the third day-long walkout by teachers, civil servants and other public sector employees in less than six months. It comes as Macron seeks to implement plans to cut more than 100,000 public sector staff and link pay awards to performance.

President of the political movement 'En Marche !' (Onwards !) and French presidential election candidate Emmanuel Macron meets strike employees of Whirlpool on April 26, 2017 in Amiens, France.
Chesnot | Getty Images
President of the political movement 'En Marche !' (Onwards !) and French presidential election candidate Emmanuel Macron meets strike employees of Whirlpool on April 26, 2017 in Amiens, France.

"Our organizations do not share the objectives pursued by the government, which involve reducing the scope of the public sector with a view to abandoning or even privatizing departments," the unions said in a joint statement Tuesday, Reuters reported.

Macron's administration has previously said that reforms are necessary because the changes will reduce costs while ultimately improving efficiency.

The last major public sector strike in France was in 1995. The then-prime minister, Alain Juppe, attempted a wide program of welfare cutbacks but was forced into a climb-down after railway workers downed tools over his plans to end the right to retire at 55.

"Despite the trade unions' initial success, the government is unlikely to backtrack on its plans. The overhaul of the SNCF has become the litmus test for Macron's ability to introduce changes in sectors that have traditionally been considered unreformable; back-pedaling would only embolden trade unions to block reforms in other areas such as pensions," Teneo Intelligence's Barroso said.

— CNBC's David Reid contributed to this report.