Newswire

UPDATE 1-Trucker blockade chaos looms in France

(Updates with trucker unions rejection, farm union talks)

By Paule Bonjean

PARIS, Nov 22 (Reuters) - French truckers' unions rejected pay offers at crisis talks on Friday to try to avert nationwide blockades of the kind that crippled freight and supplies in the 1990s, but promised to negotiate through the weekend if needed.

Farm union leaders announced a breakthrough in talks on a separate row with supermarkets over food and vegetable prices and urged farmers to lift barricades blocking around 60 food depots since Wednesday evening.

The conservative government that took power in June with law and order as its top priority vowed to ensure free circulation of goods in France, but did not explicitly say it would deploy riot police to do so.

During a break in crisis talks in Paris, leaders of the CGT trucker's union said that pay offers presented by road haulage employers went nowhere near satisfying their demands.

"It's worthless. It's unacceptable," Jean-Pierre Remy, one of the key negotiators from the CGT union, said. Others said, however, unions were willing to ignore a Friday night deadline they had set and negotiate through the weekend.

Most French trucks stay off the roads at the weekend, and start out again shortly before midnight on Sunday, suggesting blockades would only start in earnest in any case from Sunday night if talks fail.

Junior transport minister Dominique Bussereau announced that the government, mindful of the disruption caused by blockades in 1992, 1996, 1997, and a lesser degree in 1999, said all would be done to ensure circulation of key supplies such as petrol.

"That does not mean (the state) will break the strike but it will see that key supplies are ensured, notably oil," he said.

Industry experts said oil supplies at petrol stations could run dry after a week if truckers set up blockades.

France, a major crossroads in Europe, has borders with six countries and ferry links with Britain and Ireland. In 1997, Britain demanded compensation for costs caused to its hauliers.

EU PRESSURE

The European Commission reminded France on Thursday that it had an obligation under EU rules to ensure the free circulation of goods on its roads.

France's five-month-old government is anxious in particular to avoid a repetition of a wave of social unrest that swept the country in late 1995 and ultimately led to the demise of a previous conservative government two years later.

It has said blockades would be a "stab in the back" for an economy already suffering from the global slowdown. Data on Friday showed the French economy grew by a meagre 0.2 percent in the third quarter of 2002, less than economists had predicted.

Prime Minister Jean-Pierre Raffarin could take some comfort from a deal struck by farmers in the feud with supermarkets.

Jean-Michel Lemetayer, president of the FNSEA union leading the blockades said after talks with representatives of the supermarkets and other retailers that a deal had been struck.

"We've asked for blockades to be lifted from this afternoon," he said.

Farmers set up blockades at key food distribution depots around the country overnight on Wednesday, alleging that supermarkets were unfairly squeezing wholesale prices to inflate profits and that the dispute had gone on for far too long.

Shares in supermarket giant Carrefour were the biggest losers on the Paris bourse on Friday but were not only depressed by the food supply fears. Shares in another group, Casino, recouped losses after news of the deal with farmers.

TotalFinaElf, the largest oil refiner in France and Europe, said on Wednesday it had raised oil stocks at depots to maximum levels to forestall supply disruption by truckers.