Sarkozy Meets Unions To Avert Protest Chaos

The unions want measures to protect jobs and wages, but Sarkozy`s margin for manoeuvre is limited by budgetary constraints.

French President Nicolas Sarkozy meets unions on Wednesday and will make a televised address to the nation in a bid to avert mass protests over his handling of the economic crisis.

The unions want measures to protect jobs and wages, but Sarkozy's margin for manoeuvre is limited by budgetary constraints and by resistance from bosses who say companies battling the crisis can afford no more top ups for staff.

"The unions will come out of the meeting saying they are disappointed. They have already planned a day of strikes and protests for March 19," said Guy Groux, an expert on unions at the Cevipof political research institute.

Discontent has been rising since Sarkozy announced in December a 26 billion euro ($33 billion) stimulus package that targets investment rather than directly helping consumers.

Up to 2.5 million people took to the streets in protest on Jan. 29. Since then, a general strike over the high cost of living has escalated in the French Caribbean island of Guadeloupe, stoking fears of contagion spreading to mainland France.

Protesters in Guadeloupe have ransacked shops, torched cars and blocked roads this week, exasperated after the government refused to bow to their month-long campaign for pay rises.

Opposition leaders have warned that the trouble in Guadeloupe could spark a broader protest movement which would paralyse France and further damage the economy.

The stakes are high for Sarkozy, whose popularity ratings went from bad to worse after a lengthy prime time television interview two weeks ago that was supposed to enlighten the French public on his economic strategy.

A survey released last week by the Ipsos polling group showed Sarkozy's approval rating plunged to 36 percent after the interview, 11 points down from January and the lowest reading since he won office in 2007.

Desperate to keep in touch with the public, Sarkozy will go on television again after Wednesday's negotiations, at around 1900 GMT, but this time he will keep it short and it will not be an interview but an address.

Economists are sceptical, however, that he has resources to come up with a bold stroke that will quell public discontent.

"There will be a few peanuts but it won't be proportionate to the scale of the problem," said Patrick Artus, chief economist at Natixis bank.

Gilles Carrez, an influential legislator from Sarkozy's UMP party, urged the government to clearly explain the budget constraints limiting possible state intervention.

"I'm struck by the total lack of explanation. They would have the French people believe that everything is possible. In a country saturated with debts and sick from deficits, you have to know when to stop," Carrez told Reuters.