France is bracing for a day of strikes and demonstrations over the cost of living, extending more than a month of protests as parliamentary talks over next year's budget remain deadlocked. Major public and private sector unions have called for a nationwide mobilization, bringing together the grassroots Yellow Vest movement, which emerged in 2018, and students who began protesting in September over overcrowded classrooms, teacher shortages and deteriorating school buildings.
The political backdrop is hardly conducive to compromise. With just six months before the presidential election, President Emmanuel Macron's critics are seeking to showcase their agendas and channel public anger. Eric Coquerel, leader of the National Assembly's finance committee and a member of Jean-Luc Mélenchon's far-left party, said the government could respond by swiftly opening additional credits during parliament discussions. More than half a million people took part in marches across France in mid-October, with violence and looting damaging public buildings and stores.
On Thursday, the train operator SNCF expects disrupted traffic on local and regional lines, while most of the Paris metro system is expected to run. Dockworkers have also called a strike, and the education ministry estimates that 18% of personnel will strike in public primary schools. Among the demands is a higher-than-planned increase in the minimum wage. Some 70,000 police agents will be mobilized, Interior Minister Laurent Nunez said.
The uncertainty has spilled into financial markets. The spread between French and German 10-year bond yields reached 178 basis points last month, up from 85 at the beginning of September, a level not approached since the 2011 euro-area debt crisis. The National Assembly rejected the budget bill on a first reading, and the government could still resort to Article 49.3 of the constitution to pass it without a vote.
Source: Bloomberg Markets · Summarized by HeadlinesBriefing