Chirac climbs down on pay claims to help win EU 'Yes' vote

President Jacques Chirac has performed a humiliating climbdown in his government's battle with the unions amidst fear that social unrest could derail his campaign for a "Yes" vote in the referendum on the European Union constitution.

Within days of protests that saw 100,000 strikers on the streets of Paris and at least 500,000 elsewhere, the French prime minister, Jean-Pierre Raffarin, has announced concessions on public sector pay, the minimum wage and share ownership.

The Left reacted jubilantly to Mr Raffarin's promise to reopen talks with the unions, with the daily newspaper Libération claiming that the move vindicated the unions' tactics of taking "a loaded pistol to the negotiating table".

Union leaders expressed cautious satisfaction and, sensing a government in retreat, warned that their members remained ready for further action to press their demands.

Mr Raffarin's swift about-turn will do little to enhance the image of a weak leader unable to improve unfavourable opinion poll ratings.

But he said unexpectedly high tax income had given the government "slim room for manoeuvre".

He insisted that contentious education reforms, which have provoked widespread student protests, and changes to the economically damaging 35-hour week would continue their progress through parliament.

But on the question of pay, he acknowledged that last week's demonstrations were "large and significant, conducted responsibly and part of our social dialogue".

"It is legitimate for French men and women to claim an improvement in their buying power," Mr Raffarin said on French radio.

The prime minister admits that voting in the May 29 referendum on the EU treaty will be close and France's Socialist opposition is split on the poll.

Latest polls show the proportion of Yes voters falling slightly to 56 per cent. But that percentage refers only to those already decided; more than two thirds of those questioned said they remained undecided and would take account of the government's overall performance.

Source: Telegraph