Room for Debate: A Running Commentary on the News
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Updated October 27, 2010 06:55 PM
Debaters
Angry, but Not Anarchists Fred Brown
Give Us Big Government Anne Hyde
Still Strongly Fiscally Conservative Barry W. Poulson
First Anger, Then Apathy Michael de Yoanna
The Primary Bites Back Robert Duffy
G.O.P. Missteps Scott Adler
Fading From the Picture John A. Straayer
Introduction
Ed Andrieski/Associated Press A rally in Denver this month against three anti-tax ballot initiatives.
This is part of a series of discussions on the midterm elections in various states. Previous forums were on California, Florida and Ohio.
Until recently, Colorado was a bastion of Tea Party supporters, with 33 percent of voters considering themselves part of the movement, according to a Rasmussen poll in April. That dropped to 23 percent this month.
Race Profiles: Colorado Senate Colorado Governor
Now the latest poll shows the Democratic gubernatorial candidate ahead of the two conservative candidates and the Senate race a dead heat. In addition, three separate ballot measures to lower property taxes, restrict bonding and borrowing by government, and reduce income taxes face strong voter opposition.
What has the experience in Colorado -- known for its voters' libertarian streaks -- told us about the Tea Party's strengths and prospects in this midterm election? Why is there so little support for tax-cut measures so far even though voters in the state express anger about government spending?
Read the Discussion » Topics: Colorado, Politics, Tea Party movement, elections -->
27/10 In Spain, Homes Are Taken but Debt Remains
By SUZANNE DALEY
Published: October 27, 2010
MADRID — Manolo Marbán, 59, is still living in his house in Toledo and going to work in the small, pink-and-aqua pet grooming shop he bought here in 2006, when he got swept up in Spain’s giddy real estate boom.
But Mr. Marbán does not own either anymore. The bank foreclosed on both properties last April, and he is waiting for the courts to issue the eviction notices. For most Americans facing foreclosure, that is the end of it. But for Mr. Marbán and thousands of others here, it is just the beginning of their troubles. When the gavel falls on his case, he will still owe the bank more than $140,000. “I will be working for the bank for the rest of my life,” Mr. Marbán said recently, tears welling in his eyes. “I will never own anything — not even a car.”
The real estate and banking excesses in Spain were a lot like those in the United States. Construction boomed, prices rose at an astonishing pace and banks gave out loans just as fast, often to customers like Mr. Marbán, who used the equity in his house to finance a mortgage for his shop. But those days are over. Spain now has the highest unemployment rate in the euro zone — 20 percent — and real estate prices are dropping. For many Spaniards, no longer able to pay their mortgages, the fine print in the deals they agreed to years ago is catching up with them.
Not only are Spanish mortgage holders personally liable for the full amount of the loan, but throw in penalty interest charges and tens of thousands of dollars in court fees and people can end up, like Mr. Marbán, facing a mountain of debt. Bankruptcy isn’t the answer, either. Mortgage debt is specifically excluded here.
“Effectively, you can never get rid of this debt,” said Ada Colau, a human rights lawyer who works for Plataforma, a new advocacy group formed both to give legal advice to homeowners and to push for reform of the country’s foreclosure laws. “Other countries in the European Union also have personal debt mortgages, but you can go to the courts and get relief. Not in Spain.”
Several opposition parties in Parliament have been pressing for amendments to the country’s foreclosure laws, including letting mortgage defaulters settle their debts with the bank by turning over the property. But the government of José Luis Rodríguez Zapatero has opposed such a major change in lending practices. Government officials say Spain’s system of personal guarantees saved its banks from the turmoil seen in the United States.
“It is true that we are living a hangover of a huge real estate binge,” said Marcos Vaquer, who was the under secretary of the Housing Ministry until a government reshuffle last week. “And it is true that far too many Spaniards have excessive debt. But we have not seen the problems of the U.S. because the guarantees here are so much better.”
Immigrants who moved to this country in the boom years and were the first to lose their jobs in the downturn, like Jaime Abelardo, have been the most severely affected so far. Mr. Abelardo arrived in Barcelona from Ecuador in 1999 with the promise of a job in a warehouse. A few years later, he could afford to bring his family over and buy a tiny apartment. Or so he thought. But within two years, he was laid off. He blames himself for not having been more cautious. Still, he cannot get over the figures printed on the dog-eared papers he has received from the bank.
They say he now owes nearly 260,000 euros, almost $360,000, which includes about 77,000 euros to cover all court costs, including the bank’s, his lawyer said. He bought the apartment for less than that — about 220,000 euros, he thinks, though many aspects of the deal were never clear to him. His wife has left him. His unemployment payments are about to run out. He would like to go back to Ecuador with his four children, but he does not have enough money. “I’m thinking about shooting myself,” he said.
An estimated 1.4 million Spaniards are facing potential foreclosure proceedings, according to Spain’s consumer protection association, known as the Adicae. Recent figures from the courts show that the numbers are rising fast. In 2007, there were just 26,000 foreclosures. Last year, there were more than 93,000. Early indications suggest that they will be higher again in 2010.
A recent Standard & Poor’s report found that 8 percent of Spain’s housing is now worth less than the value of the mortgage and with prices continuing to fall, experts believe, that figure could rise to 20 percent.
Advocates say that Spain’s foreclosure procedures tilt far too much in favor of the banks, virtually guaranteeing the mortgage defaulters will end up owing large amounts after they lose their homes. Banks have the right to auction houses in foreclosure and, if no buyers appear, as is often the case these days, the bank can take ownership of the house for 50 percent of its value, according to the estimate either at the time of purchase, or at the current time, depending on what is specified in the mortgage. The banks then have 15 years to go after the homeowner. And if the banks initiate proceedings at any point, the clock starts ticking again, experts say. In the meantime, the bank can charge interest on that debt.
Montse Andrés Sabaté, a lawyer with Ausbanc, a consumer association that specializes in banking services, says that the banks usually charge 5 or 6 percent, but sometimes much more. “We’ve seen 18 or even 19 percent,” Ms. Andrés said.
And then there is the matter of guarantors. Bankers pressed many homeowners to find guarantors at the time they took out the mortgages or when they began to struggle to make payments. Mario Gozálvez, a truck driver, asked his 23-year-old daughter to act as a guarantor when he used the equity in his Barcelona apartment to buy a truck three years ago. At the time, she did not even have a job and he thought of it as a silly formality. Now, she faces a lifetime of paying off his debts.
“She may not be able to inherit anything from her mother because the bank can seize it,” Mr. Gozálvez said. “No one explains this.”
Early in the crisis, experts say, the banks were lenient with immigrants who had no assets and accepted the property as payment for the loan. But some advocates say they are tougher now. Under the law, the banks have the right to collect a percentage of a debtor’s income if it is above $835 a month.
Santos González Sánchez, the chairman of the Spanish Mortgage Association, says it is the bank’s duty to try to collect. “This helps to explain why our financial entities have not gone bankrupt,” he said.
Personal liability mortgages are common in Europe. But advocates here say that aspects of Spain’s procedures — how quickly banks can foreclose, the interest rates they can charge and the repayment schedules they can demand — are particularly severe. This month, even Mr. Zapatero’s party joined in voting for a parliamentary motion to slow foreclosure proceedings.
Mr. Marbán knew he was in trouble within months of buying the pet store as his business began to taper off. To keep the bank from foreclosing, he gave it whatever he could scrape together. At one point, he sold his car at a huge discount to meet a payment. Eventually, he sold his wife’s gold bracelet.
But it was no good. He could never catch up on what he owed.
“It’s funny, when I finally lost the house, I started sleeping,” he said. “I cry sometimes, but at least I sleep now.”
Rachel Chaundler contributed reporting.
A version of this article appeared in print on October 28, 2010, on page A1 of the New York edition.
Published: October 27, 2010
MADRID — Manolo Marbán, 59, is still living in his house in Toledo and going to work in the small, pink-and-aqua pet grooming shop he bought here in 2006, when he got swept up in Spain’s giddy real estate boom.
But Mr. Marbán does not own either anymore. The bank foreclosed on both properties last April, and he is waiting for the courts to issue the eviction notices. For most Americans facing foreclosure, that is the end of it. But for Mr. Marbán and thousands of others here, it is just the beginning of their troubles. When the gavel falls on his case, he will still owe the bank more than $140,000. “I will be working for the bank for the rest of my life,” Mr. Marbán said recently, tears welling in his eyes. “I will never own anything — not even a car.”
The real estate and banking excesses in Spain were a lot like those in the United States. Construction boomed, prices rose at an astonishing pace and banks gave out loans just as fast, often to customers like Mr. Marbán, who used the equity in his house to finance a mortgage for his shop. But those days are over. Spain now has the highest unemployment rate in the euro zone — 20 percent — and real estate prices are dropping. For many Spaniards, no longer able to pay their mortgages, the fine print in the deals they agreed to years ago is catching up with them.
Not only are Spanish mortgage holders personally liable for the full amount of the loan, but throw in penalty interest charges and tens of thousands of dollars in court fees and people can end up, like Mr. Marbán, facing a mountain of debt. Bankruptcy isn’t the answer, either. Mortgage debt is specifically excluded here.
“Effectively, you can never get rid of this debt,” said Ada Colau, a human rights lawyer who works for Plataforma, a new advocacy group formed both to give legal advice to homeowners and to push for reform of the country’s foreclosure laws. “Other countries in the European Union also have personal debt mortgages, but you can go to the courts and get relief. Not in Spain.”
Several opposition parties in Parliament have been pressing for amendments to the country’s foreclosure laws, including letting mortgage defaulters settle their debts with the bank by turning over the property. But the government of José Luis Rodríguez Zapatero has opposed such a major change in lending practices. Government officials say Spain’s system of personal guarantees saved its banks from the turmoil seen in the United States.
“It is true that we are living a hangover of a huge real estate binge,” said Marcos Vaquer, who was the under secretary of the Housing Ministry until a government reshuffle last week. “And it is true that far too many Spaniards have excessive debt. But we have not seen the problems of the U.S. because the guarantees here are so much better.”
Immigrants who moved to this country in the boom years and were the first to lose their jobs in the downturn, like Jaime Abelardo, have been the most severely affected so far. Mr. Abelardo arrived in Barcelona from Ecuador in 1999 with the promise of a job in a warehouse. A few years later, he could afford to bring his family over and buy a tiny apartment. Or so he thought. But within two years, he was laid off. He blames himself for not having been more cautious. Still, he cannot get over the figures printed on the dog-eared papers he has received from the bank.
They say he now owes nearly 260,000 euros, almost $360,000, which includes about 77,000 euros to cover all court costs, including the bank’s, his lawyer said. He bought the apartment for less than that — about 220,000 euros, he thinks, though many aspects of the deal were never clear to him. His wife has left him. His unemployment payments are about to run out. He would like to go back to Ecuador with his four children, but he does not have enough money. “I’m thinking about shooting myself,” he said.
An estimated 1.4 million Spaniards are facing potential foreclosure proceedings, according to Spain’s consumer protection association, known as the Adicae. Recent figures from the courts show that the numbers are rising fast. In 2007, there were just 26,000 foreclosures. Last year, there were more than 93,000. Early indications suggest that they will be higher again in 2010.
A recent Standard & Poor’s report found that 8 percent of Spain’s housing is now worth less than the value of the mortgage and with prices continuing to fall, experts believe, that figure could rise to 20 percent.
Advocates say that Spain’s foreclosure procedures tilt far too much in favor of the banks, virtually guaranteeing the mortgage defaulters will end up owing large amounts after they lose their homes. Banks have the right to auction houses in foreclosure and, if no buyers appear, as is often the case these days, the bank can take ownership of the house for 50 percent of its value, according to the estimate either at the time of purchase, or at the current time, depending on what is specified in the mortgage. The banks then have 15 years to go after the homeowner. And if the banks initiate proceedings at any point, the clock starts ticking again, experts say. In the meantime, the bank can charge interest on that debt.
Montse Andrés Sabaté, a lawyer with Ausbanc, a consumer association that specializes in banking services, says that the banks usually charge 5 or 6 percent, but sometimes much more. “We’ve seen 18 or even 19 percent,” Ms. Andrés said.
And then there is the matter of guarantors. Bankers pressed many homeowners to find guarantors at the time they took out the mortgages or when they began to struggle to make payments. Mario Gozálvez, a truck driver, asked his 23-year-old daughter to act as a guarantor when he used the equity in his Barcelona apartment to buy a truck three years ago. At the time, she did not even have a job and he thought of it as a silly formality. Now, she faces a lifetime of paying off his debts.
“She may not be able to inherit anything from her mother because the bank can seize it,” Mr. Gozálvez said. “No one explains this.”
Early in the crisis, experts say, the banks were lenient with immigrants who had no assets and accepted the property as payment for the loan. But some advocates say they are tougher now. Under the law, the banks have the right to collect a percentage of a debtor’s income if it is above $835 a month.
Santos González Sánchez, the chairman of the Spanish Mortgage Association, says it is the bank’s duty to try to collect. “This helps to explain why our financial entities have not gone bankrupt,” he said.
Personal liability mortgages are common in Europe. But advocates here say that aspects of Spain’s procedures — how quickly banks can foreclose, the interest rates they can charge and the repayment schedules they can demand — are particularly severe. This month, even Mr. Zapatero’s party joined in voting for a parliamentary motion to slow foreclosure proceedings.
Mr. Marbán knew he was in trouble within months of buying the pet store as his business began to taper off. To keep the bank from foreclosing, he gave it whatever he could scrape together. At one point, he sold his car at a huge discount to meet a payment. Eventually, he sold his wife’s gold bracelet.
But it was no good. He could never catch up on what he owed.
“It’s funny, when I finally lost the house, I started sleeping,” he said. “I cry sometimes, but at least I sleep now.”
Rachel Chaundler contributed reporting.
A version of this article appeared in print on October 28, 2010, on page A1 of the New York edition.
27/10 Greece Said to Be Falling Short of Deficit-Cutting Goals
October 27, 2010
By LANDON THOMAS Jr.
LONDON — The mathematics of austerity are getting harder.
With economic conditions weaker than expected, tax revenue is coming up short of projections in parts of Europe. As a result, countries struggling with high deficits are now confronting the prospect that they will miss the budget deficit targets forced upon them this year by impatient bond investors.
Greece, for one, looks as if it will run a budget deficit for 2010 greater than the 8.1 percent of gross domestic product it agreed to as part of a rescue package from the International Monetary Fund and the European Union that amounted to more than $150 billion, according to a person briefed on the matter but not authorized to speak about it.
The adjustment, at worst, would result in a deficit of 8.9 percent of Greece’s output, this person said. Normally, such a small difference would not be cause for alarm.
But after the latest upward revision in Greece’s 2009 deficit — to about 15.5 percent from 13.5 percent of output — the miss has spurred investor fears that the Greek government will be unable to close the gap and that Greece may ultimately be forced to restructure its mountain of debt with foreign investors.
As word seeped into the market on Wednesday, Greek 10-year bond yields jumped to 10.3 percent, from 9.3 percent. That more or less reversed what had been an impressive bond market rally, when yields fell from more than 11 percent to just under 9 percent over the last month. The cost of insuring Greek bonds against a possible default also rose.
A spokesman for the Greek finance ministry declined to comment.
There has not been any suggestion from the I.M.F. or the European Union that this slip represents a lack of resolve by Prime Minister George A. Papandreou to maintain the harsh spending cuts, structural reforms and tax increases that lie at the heart of the Greek reform effort.
But it does highlight just how difficult it is for stagnating economies with rising unemployment rates to make fiscal adjustments exceeding 10 percent of their economic output in just a couple of years.
In Ireland, which is expecting its third consecutive year of economic contraction this year, the government says it will need an additional 15 billion euros in budget cuts to reduce its deficit from 32 percent of gross domestic product to 3 percent by 2014.
And in Portugal, the government is struggling to meet its deficit target of 9 percent of output as the economy continues to weaken.
Spain also faces a difficult task in slicing its deficit to 6 percent next year, from 11 percent last year, in the face of a slumping economy.
“All the leading indicators for the peripheral economies are negative, so it is logical that these countries will fall short of their projections,” said Jonathan Tepper, an analyst at Variant Perception, a London-based research boutique. “People tend to forget that when you are in a deflationary dynamic, your tax take will be going down.”
In Ireland, the deficit has been swollen by the cost of bailing out the country’s failed banks. But because there have been so many upward revisions in the deficit, investors are growing more doubtful that the government will be able to meet its target in the years ahead.
The deficit misses by Europe’s weaker economies also provide fodder for the critics of the I.M.F.-inspired programs who fear that these dire menus of spending cuts and tax increases will send economies into prolonged recessions from which they will be unable to recover.
Eurostat, the statistical agency for the European Commission, has had a team in Athens for a few weeks, digging through the Greek budget figures, and is expected to announce the final revision of the country’s 2009 deficit in mid-November — a change that could expose debt as more than its current level of 133 percent of G.D.P.
Eurostat’s investigation has the full support of the Greek government, which has said many times that it wants to put the nightmare of the ever-increasing 2009 deficit — initially estimated by the previous government at 5 percent — behind it.
So far, Greece has made solid progress in its austerity program, cutting expenditures by 11 percent through September from the comparable period last year. But revenue, always difficult to spur in an economy with a poor record of tax collection, has been hurt by this year’s 4 percent economic contraction and is up just 3 percent.
Government officials, while acknowledging that July and August were off target, are banking on increased taxes and measures to curb tax evasion to kick in during the second half.
Still, Greek officials are contemplating changes in their spending targets to reflect the lower revenue.
This year, spending cuts will make up two-thirds of the deficit-cutting plan, with tax increases the remainder. In 2011, the plan was for tax increases to constitute 60 percent of the fiscal adjustment, with spending cuts the rest.
Now there is talk within the Greek finance ministry of reversing this ratio. The view is growing that it will be easier and quicker to cut expenditures rather than raise taxes — an approach that has been accepted by many economists and lies at the heart of the British government’s deficit-cutting strategy.
Though such an approach may look good on paper and produce quicker results, the political and social consequences of further cuts in wages and public sector services could be severe not just for Greece but Europe as a whole.
A version of this article appeared in print on October 28, 2010, on page B1 of the New York edition.
By LANDON THOMAS Jr.
LONDON — The mathematics of austerity are getting harder.
With economic conditions weaker than expected, tax revenue is coming up short of projections in parts of Europe. As a result, countries struggling with high deficits are now confronting the prospect that they will miss the budget deficit targets forced upon them this year by impatient bond investors.
Greece, for one, looks as if it will run a budget deficit for 2010 greater than the 8.1 percent of gross domestic product it agreed to as part of a rescue package from the International Monetary Fund and the European Union that amounted to more than $150 billion, according to a person briefed on the matter but not authorized to speak about it.
The adjustment, at worst, would result in a deficit of 8.9 percent of Greece’s output, this person said. Normally, such a small difference would not be cause for alarm.
But after the latest upward revision in Greece’s 2009 deficit — to about 15.5 percent from 13.5 percent of output — the miss has spurred investor fears that the Greek government will be unable to close the gap and that Greece may ultimately be forced to restructure its mountain of debt with foreign investors.
As word seeped into the market on Wednesday, Greek 10-year bond yields jumped to 10.3 percent, from 9.3 percent. That more or less reversed what had been an impressive bond market rally, when yields fell from more than 11 percent to just under 9 percent over the last month. The cost of insuring Greek bonds against a possible default also rose.
A spokesman for the Greek finance ministry declined to comment.
There has not been any suggestion from the I.M.F. or the European Union that this slip represents a lack of resolve by Prime Minister George A. Papandreou to maintain the harsh spending cuts, structural reforms and tax increases that lie at the heart of the Greek reform effort.
But it does highlight just how difficult it is for stagnating economies with rising unemployment rates to make fiscal adjustments exceeding 10 percent of their economic output in just a couple of years.
In Ireland, which is expecting its third consecutive year of economic contraction this year, the government says it will need an additional 15 billion euros in budget cuts to reduce its deficit from 32 percent of gross domestic product to 3 percent by 2014.
And in Portugal, the government is struggling to meet its deficit target of 9 percent of output as the economy continues to weaken.
Spain also faces a difficult task in slicing its deficit to 6 percent next year, from 11 percent last year, in the face of a slumping economy.
“All the leading indicators for the peripheral economies are negative, so it is logical that these countries will fall short of their projections,” said Jonathan Tepper, an analyst at Variant Perception, a London-based research boutique. “People tend to forget that when you are in a deflationary dynamic, your tax take will be going down.”
In Ireland, the deficit has been swollen by the cost of bailing out the country’s failed banks. But because there have been so many upward revisions in the deficit, investors are growing more doubtful that the government will be able to meet its target in the years ahead.
The deficit misses by Europe’s weaker economies also provide fodder for the critics of the I.M.F.-inspired programs who fear that these dire menus of spending cuts and tax increases will send economies into prolonged recessions from which they will be unable to recover.
Eurostat, the statistical agency for the European Commission, has had a team in Athens for a few weeks, digging through the Greek budget figures, and is expected to announce the final revision of the country’s 2009 deficit in mid-November — a change that could expose debt as more than its current level of 133 percent of G.D.P.
Eurostat’s investigation has the full support of the Greek government, which has said many times that it wants to put the nightmare of the ever-increasing 2009 deficit — initially estimated by the previous government at 5 percent — behind it.
So far, Greece has made solid progress in its austerity program, cutting expenditures by 11 percent through September from the comparable period last year. But revenue, always difficult to spur in an economy with a poor record of tax collection, has been hurt by this year’s 4 percent economic contraction and is up just 3 percent.
Government officials, while acknowledging that July and August were off target, are banking on increased taxes and measures to curb tax evasion to kick in during the second half.
Still, Greek officials are contemplating changes in their spending targets to reflect the lower revenue.
This year, spending cuts will make up two-thirds of the deficit-cutting plan, with tax increases the remainder. In 2011, the plan was for tax increases to constitute 60 percent of the fiscal adjustment, with spending cuts the rest.
Now there is talk within the Greek finance ministry of reversing this ratio. The view is growing that it will be easier and quicker to cut expenditures rather than raise taxes — an approach that has been accepted by many economists and lies at the heart of the British government’s deficit-cutting strategy.
Though such an approach may look good on paper and produce quicker results, the political and social consequences of further cuts in wages and public sector services could be severe not just for Greece but Europe as a whole.
A version of this article appeared in print on October 28, 2010, on page B1 of the New York edition.
26/10 French Senate Approves Final Draft of Pension Reform Bill
October 26, 2010
By STEVEN ERLANGER
PARIS — As hundreds of students demonstrated outside, the French Senate approved the final draft of a bill on Tuesday that would raise the minimum retirement age.
The final bill, in a text now agreed to by both houses of Parliament, is expected to be passed Wednesday by the National Assembly, where President Nicolas Sarkozy has a clear majority. After examination by the Constitutional Council, the bill is expected to become law in mid-November and go into effect gradually beginning in July, bringing the age for a minimum pension to 62 from 60 and for a full pension to 67 from 65.
The bill has various exceptions for manual laborers and women who take successive maternity leaves, and it includes a promise of a new debate on a more comprehensive review of the French pension system in 2013, after the next presidential election.
More important for the government, the union stranglehold on refineries and fuel depots began to weaken on Tuesday, with more gasoline available for gas stations. Walkouts at several oil refineries ended Tuesday morning, with 4 of France’s 12 refineries now functioning. Strikes at major ports, like Marseille, still prevented crude oil from reaching some refineries, and France continued to import fuel at four times the usual rate.
Train services were nearly normal, and garbage collectors in Marseille returned to work after a two-week strike, facing at least 10,000 tons of refuse.
The unions have called for national strikes on Thursday and again on Nov. 6. But at this point the government is apparently confident that it can wait out the demonstrations, which seem to be softening and may soften further after the National Assembly casts its final vote.
Despite a weeklong school break, about 1,000 students turned out to demonstrate in front of the 17th-century Senate building. Carrying banners with slogans like “No, no to your bogus reform, yes, yes to revolution,” some said that the pension protest was an important moment of politicization for their generation.
Sophie Frebillot, 19, a philosophy student, said that student assemblies over the past few weeks were “increasingly being fed by an outcry that’s growing more and more generalized,” and then cited “tons of problems in society in general, and this movement against the pension reforms allows us to express that discontent, too.”
She said she would continue to protest, citing a previous government’s bow to student pressure in 2006 to abandon a law on youth unemployment. “That means that everything a government does, the street can undo,” she said.
François Hume-Ferkatadji, 21, a graduate student in urban policy, said that “people infantilize us, but we’re also old enough to have a political consciousness.” He said that pension reform was “necessary, for we must conserve the welfare state,” but that the current effort contained inequalities concerning women, young people and those in strenuous or dangerous occupations.
“In France, we talk a lot about national identity,” he said. “Well, this is the French national identity: it’s the struggle, it’s resistance, and right now it’s not a big joke for young people.”
Union officials say they are angry with the government for stopping a process of negotiation over the pension reform. François Chérèque, secretary general of the country’s second largest union, C.F.D.T., said Monday night on television that he was open to talks on better job opportunities for young people and senior citizens.
But on Tuesday, Mr. Chérèque sounded more bitter about relations with Mr. Sarkozy and his aides, who had begun their term trying to reach out to the unions. “There’s nothing left,” Mr. Chérèque told the newspaper Le Monde. “The harm done is deep, deep.”
Mr. Sarkozy’s aides have already said that they would make a gesture to the opposition and rethink a limit on taxes of 50 percent of yearly income for the wealthy, while Prime Minister François Fillon was conciliatory, promising a new round of dialogue with the unions on how to increase jobs for young people and older ones.
“We are beginning to exit the social crisis, but the situation remains difficult,” Mr. Fillon told party legislators. “Political firmness without social dialogue is a fault, but social dialogue without political firmness is a grave error.”
Marie-Pia Gohin contributed reporting.
By STEVEN ERLANGER
PARIS — As hundreds of students demonstrated outside, the French Senate approved the final draft of a bill on Tuesday that would raise the minimum retirement age.
The final bill, in a text now agreed to by both houses of Parliament, is expected to be passed Wednesday by the National Assembly, where President Nicolas Sarkozy has a clear majority. After examination by the Constitutional Council, the bill is expected to become law in mid-November and go into effect gradually beginning in July, bringing the age for a minimum pension to 62 from 60 and for a full pension to 67 from 65.
The bill has various exceptions for manual laborers and women who take successive maternity leaves, and it includes a promise of a new debate on a more comprehensive review of the French pension system in 2013, after the next presidential election.
More important for the government, the union stranglehold on refineries and fuel depots began to weaken on Tuesday, with more gasoline available for gas stations. Walkouts at several oil refineries ended Tuesday morning, with 4 of France’s 12 refineries now functioning. Strikes at major ports, like Marseille, still prevented crude oil from reaching some refineries, and France continued to import fuel at four times the usual rate.
Train services were nearly normal, and garbage collectors in Marseille returned to work after a two-week strike, facing at least 10,000 tons of refuse.
The unions have called for national strikes on Thursday and again on Nov. 6. But at this point the government is apparently confident that it can wait out the demonstrations, which seem to be softening and may soften further after the National Assembly casts its final vote.
Despite a weeklong school break, about 1,000 students turned out to demonstrate in front of the 17th-century Senate building. Carrying banners with slogans like “No, no to your bogus reform, yes, yes to revolution,” some said that the pension protest was an important moment of politicization for their generation.
Sophie Frebillot, 19, a philosophy student, said that student assemblies over the past few weeks were “increasingly being fed by an outcry that’s growing more and more generalized,” and then cited “tons of problems in society in general, and this movement against the pension reforms allows us to express that discontent, too.”
She said she would continue to protest, citing a previous government’s bow to student pressure in 2006 to abandon a law on youth unemployment. “That means that everything a government does, the street can undo,” she said.
François Hume-Ferkatadji, 21, a graduate student in urban policy, said that “people infantilize us, but we’re also old enough to have a political consciousness.” He said that pension reform was “necessary, for we must conserve the welfare state,” but that the current effort contained inequalities concerning women, young people and those in strenuous or dangerous occupations.
“In France, we talk a lot about national identity,” he said. “Well, this is the French national identity: it’s the struggle, it’s resistance, and right now it’s not a big joke for young people.”
Union officials say they are angry with the government for stopping a process of negotiation over the pension reform. François Chérèque, secretary general of the country’s second largest union, C.F.D.T., said Monday night on television that he was open to talks on better job opportunities for young people and senior citizens.
But on Tuesday, Mr. Chérèque sounded more bitter about relations with Mr. Sarkozy and his aides, who had begun their term trying to reach out to the unions. “There’s nothing left,” Mr. Chérèque told the newspaper Le Monde. “The harm done is deep, deep.”
Mr. Sarkozy’s aides have already said that they would make a gesture to the opposition and rethink a limit on taxes of 50 percent of yearly income for the wealthy, while Prime Minister François Fillon was conciliatory, promising a new round of dialogue with the unions on how to increase jobs for young people and older ones.
“We are beginning to exit the social crisis, but the situation remains difficult,” Mr. Fillon told party legislators. “Political firmness without social dialogue is a fault, but social dialogue without political firmness is a grave error.”
Marie-Pia Gohin contributed reporting.
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