Anxious French Rulers See Protests Rise in Streets, Francs Sink in Banks

THE images of hundreds of thousands of protesters, many in French cities and towns that haven't seen demonstrations of this magnitude since the Liberation, are shaking the country's ruling conservative party.

As French strikers gear up for another day of mass demonstrations tomorrow against government budget cuts, leaders on both sides are counting their supporters.

They are also counting money. Losses due to the strike top $20 million a day for the railroads alone. Add to that $800,000-a-day losses for the post office, $300 million-a-week for travel agencies, a 50 to 70 percent drop in sales for commerce in the capital, and a 40 percent drop in Paris hotel occupancy.

Union leaders hope that tomorrow's protest head count will boost their bid for a "social summit:" direct negotiations with Prime Minister Alain Juppe on the government's reform plan. A large turnout could also give the strike new momentum, which had slipped as public service workers in some sectors began returning to their jobs last week.

While government leaders aren't yet using the "n" word - negotiations - they are opening new avenues to settle the conflict. Last week, the government appointed a mediator to discuss the government's plan to restructure the railroads. On Dec. 3, the education minister proposed an emergency plan to meet student grievances.

But Prime Minister Juppe, in the tradition of high French civil servants, is making his own case to the public by the numbers. Juppe's government, more than any in recent memory, has been recruited from France's most prestigious schools, where a solid education of mathematics and a good grasp of "the numbers" have marked the standard of success.

This weekend, the government launched an ad campaign reminding strike-weary citizens why it launched reform of the social security system in the first place. The case for change is grounded in statistics. The system is running a deficit of $46 billion, or $800 owed by every man, woman, and child; therefore, it must be reformed.

Key allies rallied to the French government's defense last week. At a French-German summit last week, German Chancellor Helmut Kohl congratulated French President Jacques Chirac for his nation's "considerable effort" to reduce the deficit and "thus prepare France to face the future."

To reach the goal of a single European currency, France is committed to reducing its budget deficit by 3 percent of gross domestic product by the end of 1997.

But key conservatives are distancing themselves from their government's battle. Former Interior Minister Charles Pasqua, for example, criticized the government for dogmatism and called for a change of politics.

"Nothing can be done without dialogue," he told the weekly L'Express last week.

Mr. Pasqua also argued for delaying implementation of a Europe-wide currency. "A single currency could well be put in place in 2001 rather than in 1999. That wouldn't be dramatic."

Some party pundits are preparing for Mr. Juppe's exit, saying he has the right ideas but the wrong methods. But for French voters, the concern is more than method. In the most recent survey, some 53 percent polled said they did not want social-security reform.

For students, who along with railroad workers have been the most visible presence in street demonstrations, the number of most immediate concern is the number of unemployed youth.

In 1994, more than half of all young people were not in work, while only a quarter were in jobs paid at market rates, according to the Paris-based Organization for Economic Cooperation and Development.

During economic recession in the 1990s, many youths moved into the nations universities in the hope that education would help them find jobs. The nation's university population grew from 29.9 percent of youths aged 16 to 25 in 1983 to 45.7 percent in 1994.

But for many, the nation's underfinanced universities seemed little more than a warehouse for the unemployed. And with recruitment frozen at many private French firms, the only hope for stable employment seemed to be in the public sector. Long scorned by university graduates, the public sector is now the No. 1 choice of 40 percent of French students.

"The student strikers in May 1968 were relatively privileged, in an economy in expansion," says Guy Bois, professor of history at the University of Paris.

"Today, the most militant students are ... in the less-privileged universities in the west and south of France. They're protesting the fact that the government put them in universities without the means to work," he said.

These students are the footsoldiers for the current demonstrations and weigh heavily in any government plan to address grievances raised by this strike.