Private and public sector workers demonstrate over pension reforms in Lyon
By Nicholas Vinocur
PARIS (Reuters) - Thousands of people took to the streets across France against proposed pension reforms on Tuesday, though there was no repeat of the turmoil triggered by more radical changes to the indebted retirement system in 2010.
France's powerful CGT union led calls for mass strikes, but most trains and other public services appeared to run normally and other more moderate unions stayed away.
The relatively low-key rallies suggested Socialist President Francois Hollande had managed to avoid a full confrontation with the powerful unions ahead of a parliamentary vote on the reforms next month.
Some unions say the reforms' proposed extension of the pension pay-in period would punish workers while letting companies off the hook.
The changes, the most closely watched of Hollande's 15 months in office, aim to help plug a deficit in the retirement system expected to reach more than 20 billion euros ($26.5 billion) by 2020 if nothing is done.
They stop short of more radical measures urged by the European Union and some investors, particularly any extension of the retirement age. The last increase in the age, brought in by former President Nicolas Sarkozy, prompted hundreds of thousands to protest.
The CGT said around 350,000 people had turned up for rallies across the country - a number more than double the police's estimate.
REFORM "IN RIGHT DIRECTION"
FO union leader Jean-Claude Mailly, who marched in Paris, said Hollande could still be punished for the changes during municipal elections next year.
"The government needs to be careful ... When you don't see huge crowds in the street, it (the anger) comes out in the voting booth, and that's not necessarily better," he said.
Polls show the far-right National Front party is ready to capitalize on frustration over high unemployment and belt-tightening measures.
The main effect of Hollande's reforms would be to extend the pay-in period for pension contributions to 43 years by 2035 from the current 41.5.
European Commissioner for Economic and Monetary Affairs Olli Rehn gave the changes a guarded welcome in an interview with Le Figaro, but he urged Hollande to prove they would not add to labor costs already seen as too high .
"This a reform 'a la francaise', it goes in the right direction," he told the centre-right daily newspaper.
Analysts have been more downbeat about the draft pension bill than Rehn, saying it leaves deep structural problems untouched and misses an opportunity for a proper reform.
The reform aims to help France cut its public deficit to 3 percent of economic output by 2015 in line with a European deadline - two years later than originally planned.
For the first time, Finance Minister Pierre Moscovici acknowledged on Tuesday the Socialist government would have to use the full two years to hit the target using a combination of spending cuts, structural reforms and tax hikes.
The government had targeted a deficit this year of 3.7 percent of gross domestic product (GDP) and had initially aimed to bring it down to 2.9 percent in 2014.
($1 = 0.7538 euros)
(Reporting By Emmanuel Jarry and Gerard Bon; Writing by Nick Vinocur; Editing by Andrew Heavens)