FRENCH refinery workers have continued their strikes as a petrol crisis drags on across the country, with authorities threatening to resort to force to end the strikes.
Long lines of cars could be seen across France on Friday as drivers were waiting sometimes for hours to fill up their cars. Many gas stations have been forced to temporarily close as one-third of France’s gas stations are experiencing temporary shortages, with the Paris area and northern France being the most affected after French labour unions called for strikes and protests over wages and working conditions.
‘From the beginning, the government has downplayed the strike’s impact and underestimated the discontent and this is where we end up,’ the powerful General Confederation of Labour (CGT) union head Philippe Martinez said on Friday.
The strikers demand what they feel should be their share of windfall profits generated by high oil and gas prices amid the global energy crisis and cost of living crisis triggered by the conflict in Ukraine.
The French government has threatened to intervene to break blockades of refineries and oil depots as workers demanding higher wages and better working conditions plan to extend their strike action.
However, French officials threatened to use force if the country’s energy sector workers did not immediately end their strike, having previously threatened to use emergency powers to order essential workers back to the job on pain of fines or jail time.
The government announced on Wednesday it was putting the emergency measures in force.
French Minister for Energy Transition, Agnes Pannier-Runacher, said on Friday that she hoped the government-ordered requisition aimed at ‘ensuring that the French get out of that nightmare, that unbearable situation,’ would get the petrol situation back to normal ‘as quickly as possible’.
Meanwhile, strikes reportedly stopped at ExxonMobil’s Esso wing in France on Friday after the CFDT and CFE-CGC unions reached a salary hike deal earlier this week. The CFDT and CFE-CGC unions, which together represent a majority of the group’s French workers, agreed to a 7 per cent pay rise and a financial bonus.
Iranian Foreign Ministry spokesman Nasser Kan’ani has slammed France’s double standards in dealing with the energy sector workers’ strikes.
However, the CGT union, which has been at the core of the weeks-long strikes at oil major TotalEnergies, slammed the door to talks on Friday and refused to end the walkout, holding out for a 10 per cent raise.
France’s biggest labour union, the moderate CFDT, has not taken part in the strikes.
In the meantime, French officials sounded the alarm, warning that the conflict in Ukraine must not catapult the United States into a position to dominate the global energy market while the EU nations are paying the price for the ongoing conflict with Russia.
Speaking to lawmakers earlier this week at the National Assembly, French Finance Minister Bruno Le Maire said it was unacceptable that Washington ‘sells its liquefied natural gas at four times the price that it sets for its own industrialists’.
Le Maire insisted: ‘The conflict in Ukraine must not end in American economic domination and a weakening of the EU.
‘We must reach a more balanced economic relationship on the energy issue between our American partners and the European continent.’
Also, French President Emanuel Macron raised a warning about Europe’s declining ability to cope with decreasing gas supplies in the not-too-distant future.
Macron, who was speaking at the EU summit in the Czech capital, said throughout the 2023-2024 winter, the continent is going to have an even worse time dealing with limited gas supplies than it has for the coming winter.
The French leader said last week that Europe was going to hold crunch talks with gas suppliers and turn to big Asian ‘partner countries’ to purchase gas.
In this regard, France has held talks with Saudi Arabia and the United Arab Emirates on diversifying Europe’s energy supplies in order to reduce the continent’s dependence on Russia for energy.
In late March, French Foreign Minister Jean-Yves Le Drian in a phone conversation with his Saudi and UAE counterparts Faisal bin Farhan Al Saud and Abdullah bin Zayed al-Nahyan stressed the importance of coordination with the two Persian Gulf energy-exporting Arab states with a view to diversifying the oil and gas supplies of European states.
- A senior European Central Bank official has said that uncertainty over oil and gas imports from Russia is moving the eurozone closer to a contraction in 2023.
Speaking to the Lithuanian business weekly Verslo zinios, European Central Bank Vice President Luis de Guindos said what was considered a possible bearish scenario in September is approaching the base scenario.
Downside scenarios projected by the European Central Bank in September showed the eurozone economy shrinking by around 1% next year, while the baseline scenario had previously predicted growth of 0.9%.
De Guindos said that the difference between the base and downside scenarios depended on the process of how energy was supplied from Russia.
‘The assumption under the baseline scenario is that 20 per cent of energy deliveries would continue to be supplied, whereas the downside scenario assumes a total cut-off.’
Russia has drastically reduced its gas supply to Europe in recent months, following the tightening of Western countries’ sanctions against Moscow.
Since late August, no gas has been exchanged through the main and important Nord Stream 1 pipeline between Russia and Germany, the largest contributor to the European economy.
The consequences of the war also caused energy prices to rise sharply in continental Europe, followed by inflation reaching a new record.
The European Central Bank, like other central banks in the world, has decided to increase the bank interest rate to curb inflation and reduce prices.
According to reports, the inflation in 19 countries of the Eurozone reached its highest level of 10 per cent in September.
The economic crisis in the Eurozone may only be getting started, with data showing a slowdown of recession-level proportions.
According to de Guindos, if the pessimistic outlook of the European Central Bank is realised, annual inflation will rise to 8.4% this year and 6.9% in 2023.
The European Central Bank’s Governing Council is scheduled to hold its next meeting on October 27 to review European economic conditions, and observers expect another rate hike of 0.75 per cent.
De Guindos, however, said that European authorities will do their best to bring inflation back to the two per cent target rate.
A Belgian official has warned of blackouts if energy prices are capped.
In the meantime, the Prime Minister of Belgium, Alexander de Croo, has warned that the electricity price restrictions requested by some of the opposition may lead to the sale of electricity in parallel markets and blackouts in Belgium.
The Belgian government has been taking steps to control electricity prices across Europe since March, but has so far failed to take action to tackle rising energy costs on the continent.
In an interview with the RTBF television channel, de Croo said that if the price of electricity in Belgium is limited, electricity may be sold in neighbouring countries, and this could bring the risk of blackouts for Belgium.
Belgium’s federal government has previously announced directives to reduce electricity consumption in public buildings and tax the profits of energy companies such as Engie (ENGIE.PA ) and TotalEnergies (TTEF.PA).
France has announced price caps for home energy prices and many are upset that the caps will not begin until next year.
The statistics office of the European Union known as Eurostat announced earlier this year that Belgium has the highest energy inflation rate among European countries and that the Brussels government intends to reduce prices for consumers only through taxes and tariffs.
European Union leaders are scheduled on October 20 and 21 to convene a meeting to find a solution to the energy crisis that has caused inflation and harmed economies across the bloc.
The draft of the meeting states that the leaders of the European countries will agree to develop a new benchmark that will examine the conditions of the gas market more carefully.
