France acts to buy off social unrest before Euro soccer kickoff

By Brian Love and Ingrid Melander PARIS (Reuters) - France's government sought to buy off social unrest and calm protests against labor law reform before a European soccer tournament kicks off, announcing a pay rise for school teachers and intervening in reorganization talks at the SNCF railways. The Socialist government of Prime Minister Manuel Valls urged the hardline CGT union, which is leading a rail strike from Tuesday evening, to propose ways out of the confrontation over a labor reform bill to make hiring and firing easier. President Francois Hollande says he will not back down on key provisions of the proposed reform and won support on Tuesday from visiting European Commission President Jean-Claude Juncker, who called the bill a modest but necessary step. "This isn't some monstrous reform, it's not an attack on French labor law," the EU chief executive told the French Presidential Press Association. "These are adjustments that remove some rigidities. It would be good if France did this." Hollande moved to prevent a range of grievances coalescing into a broader protest movement by restoring slashed funding for research on Monday and pledging public money to settle a dispute over performing artists' unemployment insurance. He also hinted in an interview with Sud-Ouest newspaper that he would announce an easing of cuts in state financing for local authorities when he addresses a congress of mayors this week. On Tuesday, the government announced a pay rise for school teachers worth one billion euros ($1.12 billion) by 2019 and said it had intervened over the heads of management of the SNCF state railways to speed up negotiations on a reorganization. "Santa Claus has come," centrist opposition UDI floor leader Philippe Vigier said. "They are resorting to any means to try to calm the revolt." Transport Minister Alain Vidalies told France Inter radio "we need to accelerate things" to settle a dispute over working time which has poisoned labor relations at SNCF. Management has been asked to put final reorganization proposals to unions by next Monday to help clear the air. The rail stoppage and calls for strikes in other transport sectors later this week have raised the spectre of chaos when France hosts the Euro 2016 soccer tournament from June 10 to July 10, when some 2.5 million fans are expected in stadiums, including 1.5 million foreign visitors. "LET'S TALK" While Hollande rejected the CGT's demand to withdraw the labor reform, his ministers said they hoped to defuse the conflict if CGT chief Philippe Martinez showed willing. "We've been hearing in the last few hours that Mr Martinez is saying 'Let's talk'," Labour Minister Myriam El Khomri told RTL radio. "I am waiting for proposals from the CGT." Prime Minister Valls told parliament the government would not gut the reform of key elements such as a clause that gives firms more scope to agree in-house deals on pay and conditions, saying that beyond that, "my door is open". "This government will not give in," he told lawmakers. "We must break down these barriers that prevent hiring." On Monday evening, Martinez said in a debate on RTL radio: "Let's talk again", adding there was "no pre-condition". Valls condemned comments by employers' leader Pierre Gattaz who accused the CGT in an interview with the daily Le Monde of behaving like "thugs" and "terrorists". Gattaz also encouraged companies to take legal action to uphold the right to work. Railway workers were due to strike from 7 p.m. (1700 GMT) in what the CGT and smaller unions have warned will be a rolling stoppage. The reformist CFDT union, the largest by membership ahead, lifted its strike call after the government concessions. SNCF said the strike was expected to halt 40 percent of high-speed TGV trains and up to two-thirds of services on other lines and disrupt some Thalys services to Belgium and the Netherlands but not Eurostar trains to London. Vidalies said stoppages on the Paris RER and Metro urban transport networks from June 2 were unlikely to be as disruptive because the CGT had less clout on those services. Pilots at Air France announced on Monday that they too were ready to strike over planned salary curbs but had set no date. Air controllers are also planning stoppages from Friday. Strikes have halted several oil refineries but oil industry federation chief Francis Duseux said car fuel shortages seemed to be easing with one in five petrol stations short of fuel. Some 90,000 police and security teams are being mobilized to keep fans safe during a month-long soccer fiesta. France remains under emergency rules after attacks in which Islamist militants killed 130 people in Paris last November. ($1 = 0.8962 euros) (Additional reporting by Richard Lough and Simon Carraud; Writing By Brian Love; Editing by Paul Taylor/Mark Heinrich)