Government seeks end to rail strike with 35 bn-euro debt pledge

The French government has agreed to absorb 35 billion euros in debt from the state railway SNCF, union officials said Friday, raising the chances of an end to nearly two months of strikes.

Luc Berille, the head of the UNSA union, said the state had offered to take on 35 billion euros ($41 billion) of the SNCF's debt load of 46 billion euros, starting with 25 billion as soon as 2020.

"The prime minister was specific," Berille said after talks with premier Edouard Philippe, adding that the government would increase infrastructure investment by 200 million euros a year to reach an annual total of 3.8 billion euros.

"The issue is moving forward" and "there is now dialogue", he added.

All trade unions representing staff on the SNCF have backed the longest-ever strike sequence on the network, which began in early April and has seen workers walk out on two days out of every five.

The conflict between centrist President Emmanuel Macron and the rail unions, a historic bastion of the labour movement, is seen as a key test of the president's resolve and ability to push through change.

Absorbing the debt has been a key demand from unions and the government's pledge raised the prospect of an end to the standoff, but probably not immediately.

Roger Dillenseger, of the UNSA's rail branch, the second-largest union at the company after the hardline CGT, said it would consult members about whether to continue the stoppages.

"We still have major concerns" but "the negotiations are paying off," he said.

The CGT, which has spearheaded resistance nationally and organised numerous protests against Macron, said it planned to keep up the stoppages which are scheduled to last until the end of June.

Earlier this week, a vote among SNCF employees organised by unions showed that 95 percent of 90,000 respondents rejected the government's proposed rail reforms, the CGT announced Wednesday.

But the strike has been progressively weakening since it began, with participation falling among staff.

Public opinion remains marginally on the side of the government as the rail reform legislation winds its way through parliament, with a vote in the upper house scheduled for June 5.

Money for reform

Philippe is holding meetings with the main rail unions on Friday as he seeks an end to the conflict and will meet with SNCF chief Guillaume Pepy later in the day.

The state's decision to take on a large part of the SNCF's debt, built up over decades of investment in high-speed lines and other expenses, was always expected -- but the government had made it conditional on other reforms.

Macron has pledged extensive changes aimed at making French railways more efficient ahead of the opening of the European market to passenger rail competition starting in 2020.

Most controversially, he wants to end the job-for-life protections and special status enjoyed by railway workers -- but only for new recruits.

The unions this week indicated they would accept the phasing out of the special status in exchange for guarantees that the government will ensure a "strong" new collective labour agreement for rail workers.

The unions also oppose the transformation of the SNCF into a joint-stock company whose shares would be held by the state, which they see as a first step towards privatisation.

The government has repeatedly denied this.