French unions return to streets in make-or-break pension protest

French trade unions disrupted rail services, shut schools and brought demonstrators onto the streets in cities across France on Thursday in a make-or-break push to force President Emmanuel Macron to abandon his planned pension reform.

The country's hard-left unions rallied supporters hoping to regain momentum at a time participation in a 36-day long public sector strike wanes and opinion polls show public backing for the industrial action dropping.

Police fired teargas at protesters in Nantes in a brief skirmish while in Bordeaux, Marseille and Toulouse, workers waved union flags and trailed smoke flares as they protested peacefully ahead of a demonstration in Paris later in the day.

"You stop a protest movement when workers feel their demands are on the table," hardline CGT union boss Philippe Martinez told Europe 1 radio. "We've had no response from the government."

Former investment banker Macron wants to streamline France's unwieldy pension system and incentivise the French to stay in work longer to pay for some of the most generous retirement benefits in the industrialised world.

The proposed reform would be the biggest overhaul of the system since World War Two and is central to the president's drive to make the French labour force more flexible and more competitive globally.

He says the myriad special benefits handed out to different types of worker deter mobility within the job market.

If Macron succeeds in defeating the unions - he has already stared them down over reform of state-run SNCF railways and an easing of labour laws - he will strengthen his hand to embark on further pro-business reforms as he eyes re-election in 2022.

The strike has hit transport in Paris the hardest and commuters on Thursday again grappled with skeleton services on suburban and metro lines. Power sector walkouts saw electricity production fall by about a 10th, or nearly 7 gigawatts.

Total said its five refineries were producing normally but were unable to ship out products. Its gas stations nationwide were well supplied, it said.

TORTUOUS NEGOTIATIONS

French employees receive among the world's most generous state pensions through a system divided into dozens of separate schemes. Macron wants a "points" system to treat contributions from all workers equally. Unions argue this amounts to an attack on hard-earned benefits.

While the strikes are the longest running in decades, they have failed to paralyse France in the way achieved by a wave of industrial action in 1995 that forced a government u-turn from which the prime minister never recovered.

Nonetheless, in the first pointer on the strike's impact economic sentiment, consumer confidence fell sharply in December and retailers, hoteliers and restaurateurs complain of a sharp fall in revenue.

The government's strategy is to pick off individual sectors with bespoke concessions, raising questions over prospects for ending up with the desired single system, and seek a compromise with the reform-minded CFDT union, France's largest.

The CFDT opposes the government's plan to financially penalise people who stop working before 64, two years later than the legal retirement age. Winning the CFDT's support is key to the government ending the stalemate.

The CFDT has proposed a multi-party conference that would seek a way to balance the pension budget without requiring people to work longer. Lawmakers close to Macron have suggested the extended retirement age could be a temporary measure.