French strike hits refinery output in labour reform showdown

By Marc Leras and Brian Love

MARSEILLE/PARIS (Reuters) - France's Socialist government drew battle lines with one of the country's biggest trade union's on Tuesday over labour market reforms as a strike by oil workers forced at least five refineries to halt or slow down operations.

Riot police fired tear gas and water canon to break up a picket line blocking access to Exxon Mobil Corp's refinery outside the southern port city of Marseille, as scores of petrol stations nationwide ran dry of fuel.

"Enough is enough," said Prime Minister Manuel Valls.

The pre-dawn swoop drew a sharp riposte from the hardline CGT union, which wants to force President Francois Hollande's government to rethink the labour reforms designed to make it easier for companies to hire and fire employees.

The CGT described the police operation as an act of "unprecedented violence" as it and other unions served notice of a June 3-5 strike by air traffic controllers that will dovetail with walkouts by state rail employees, port workers and staff on the Paris metro and suburban rail networks.

The CGT, traditionally one of France's most powerful and influential trade union groups, says the reforms will unravel France's protective labour regulations, allowing firms to lay off staff more easily in hard economic times and by providing further exemptions from rules on pay and working conditions.

CGT boss Philippe Martinez vowed to push on with the strikes until Hollande withdraws the legislation.

"We'll see this through to the finish," Martinez said. "This is a government which has turned its back on its promises and we are now seeing the consequences."

Total S.A., said on Tuesday that it had shut down its Gonfreville and Feyzin refineries, was in the process of halting operations at two others and was reducing output at a fifth refinery.

The company's chief executive said the strikes could make it reconsider investments in its French plants.

Total's U.S. rival Exxon Mobil Corp. said its two French refineries were operating at normal levels, but damage to the road and terminal tracks at the southern Fos-Sur-Mer plant meant trucks could not load.

FUEL PUMP QUEUES

Hollande, plagued by dismal popularity ratings a year from elections and an unfulfilled promise to lower a jobless rate stuck at about 10 percent, says labour reform is crucial to creating new jobs.

The president blamed the fuel blockade on a small minority of people.

In parts of France, motorists swamped petrol stations, some using real-time mobile phone applications to learn where they could refill without queuing for hours or being turned away.

The panic-buying amid fuel rationing in parts of France will compound the troubles of Hollande and his government as they strive to convince voters that "things are getting better".

"The Prime Minister said there is no problem, but he doesn't see this spreading in Paris and maybe the rest of France," said Katharina Lefevre, who queued for two hours to buy fuel.

Emergency stocks could keep fuel stations open for up to two months if tapped, according to experts. But Valls said pickets aimed at halting distribution would not be tolerated.

Hollande, France's most unpopular leader in recent memory, has said he will only run for re-election if he hauls the jobless rate down.

The International Monetary Fund said France's economy was not recovering quickly enough to cut unemployment and debt significantly, and would not do so without further reforms.

(Additional reporting by Bate Felix, Emmanuel Jarry and Reuters TV,; Editing by Andrew Callus and Richard Lough)