France: What impact of strikes on the country?

A massive strike began on 5 December 2019, following the call by several trade union organisations in various sectors of the economy such as transport, education, electricity and gas networks. T he current strike comes more than a year after the first yellow vests protests and also echoes the confrontation seen in 1995 , when the Juppé government announced a pension reform. In this Special Report we will examine the causes of this protest movement, the possible outcomes and the impact it could have on the economy . While the causes of the strike are the well-known discontent with the reform plans , the consequences it could have on the economy are still uncertain. A natural comparison is the strike during December 1995. At this time, t he overall impact was estimated to be around 0.2 percentage point of GDP . While noticeable in certain activities , a similar impact today would not endanger the economy . On the political front, however , the pace of reforms and government policy in general will be impacted by these massive demonstrations , m ore than two and a half years after Emmanuel Macron’s election . In addition, they are taking place in the aftermath of the weekly yellow vest demonstrations. Already on Wednesday 11 December, the prime minister announced a number of concessions in order to convince the public of the need for reform, even though the broad outline of the project remain s unchanged . Nevertheless, the outcome of the project remains highly uncertain at this point and one of the risks could be to undermine the composition of the government , from the start of 2020.