(Updates to add figures on strikers and government reaction) By Nathalie Boschat and David Gauthier-Villars Of DOW JONES NEWSWIRES
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PARIS (Dow Jones)--French workers staged a nationwide one-day strike and rallies Thursday to protest government plans to increase the pension age and challenge a key plank of President Nicolas Sarkozy's economic policy.
About 3 million people took part in the action--the second this month, the unions said, while police put the figure at just under 1 million.
Unions were planning to meet Friday to discuss further action and vowed to amplify their protests against the proposed pension overhaul, which they deem "unfair and unacceptable."
"There will be more protests," said Eric Aubin, who is in charge of pension issues at the CGT union, one of France's largest.
Another one-day strike was seen as likely, but analysts say it wouldn't be enough to derail Sarkozy's plan. An indefinite strike would threaten the president, but union members appear not to be willing to sacrifice their wages over an extended period.
Sarkozy has said he wouldn't give in on a totemic aspect of his pension plan: raising the minimum retirement age to 62 years from the current level of 60.
Thursday evening, government spokesman Luc Chatel said on French television that any further concessions to unions would be introduced next month, when French senators start debating the pension bill.
Sarkozy has staked his government's financial credibility on the pension overhaul, less than two years ahead of the next presidential elections. France has embarked on a cost-cutting drive aimed at bringing its public deficit from a projected 7.8% of gross domestic product this year to 3% in 2013--the maximum allowed under euro-zone treaties.
France's pension system has been under pressure for several years, because French people are living longer and thus spend more years drawing pensions. But the shortfall widened sharply after last year's recession caused a sharp drop in payroll-tax revenue. This year's shortfall could reach EUR32 billion.
A coalition of eight unions is united in demanding the retirement age be kept at 60, and hope to weigh in on the debate, which starts on the bill in the Senate Oct. 5 amid record-low popularity ratings for Sarkozy's right-wing government.
The pension bill, however, cleared a key hurdle last week, when it was adopted by the National Assembly, the lower house of France's parliament.
Labor Minister Eric Woerth has said the government may consider some concessions for handicapped workers and unemployed people who are close to retirement. The government may also look into measures aimed at closing the salary and pension gaps between men and women.
Thursday's strikes and marches caused significant disruptions in the transport system, with only 50% of high-speed trains and regional trains running, and the rate dropping to 25% for certain provincial networks, according to state-owned rail operator SNCF.
Workers commuting to Paris from suburbs also faced major difficulties with only one in three suburban trains circulating on some lines, whereas traffic on the Parisian underground was smoother and close to normal levels on a majority of lines, according to the RATP underground operator.
Flag carrier Air France-KLM (AFLYY) said it was canceling half of its short- and medium-haul flights out of Paris but maintaining all its long-distance flights. French oil major Total SA (TOT) Thursday said that 50% to 80% of its French refineries' employees had joined the nationwide strike but that there was "no significant impact" on output.
-By Nathalie Boschat, Dow Jones Newswires; +33 (0) 1 40 17 17 45; nathalie.boschat@dowjones.com
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