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Broken Sarkozy Promise on Gaz de France and Suez Means French Unions Will Mobilise

11.09.2007

French unions have vowed to mobilise in the coming weeks over the news that European energy companies Gaz de France and Belgian-Franco Suez Group are finally on cue to merge. French trade unions CGT, CFDT, FO, CGF-CGC, and CFTC pledged last week that they will again escalate resistance to further consolidation of Europe’s energy markets.

The French unions have banded together many times in the past to place roadblocks and barriers in the form of lawsuits and social dissent against the long planned merger. French President Nicholas Sarkozy has now become the catalyst to push the deal through.

         

The merger that would create the world’s third largest utility contradicts a European Commission priority to place more competition in gas and electric markets. It angers the French unions, and French citizens alike, who remember Sarkozy as the Finance Minister that promised Gaz de France would never fall below 70% of a state-controlled public asset.

The €90 billion merger would reduce France’s stake in the combined company to roughly 35% from 80.2%. The Sarkozy government now heralds a 35% stake as “controlling” and says the state will be a “rational shareholder.”

The French unions, however, must now wrestle with the effects of a potential deal with sell-offs, redundancies, and likely cost cutting by equity stakes that sweep in on mandated divestitures. Such businesses that will be separated include waste disposal and water, with a new GDF Suez to become Europe’s largest supplier of natural gas and the world’s largest storage terminal operator for LNG.

The five unions will build resistance through consumer groups and political pressure, as well as mass mobilisations across France. They announced they will also conduct a national petition.

The CGT predicted that consumers will be harmed by rising prices, and said the French stake at 35% will offer little in protection of workers or consumers. The CFDT said European partners ought to take Sarkozy’s new claim, “at the very least, as arrogant” and the Commission itself must consider the social consequences that mandated divestitures will bring to public utilities. CFDT said the current merger plan essentially dismantles the Suez Group, while effectively privatising Gaz de France.