Why Sarkozy could win this fight without really getting his hands dirty

France adores dates. It likes to name laws and streets and ships and historical events after them. How will October 2010 be remembered in French history?

As a May 1968? A November 2005? A July 1789? Or as just another of the left-reactionary movements against movement seen in 1995, 2003 and 2006?

An air of May 1968 hung over the Left Bank of Paris yesterday as 4,000 students (some of them rather old) marched raucously against President Nicolas Sarkozy's pension reform. If so, this was a May 1968-lite. Relatively few lycée or university students turned up.

A whiff of the suburban riots of November 2005 (the whiff of teargas) has hung over parts of France in recent days. There was scattered violence in the centre of Lyon again yesterday, mostly the work of 14 to 15-year-old disaffected kids from the city's ring of poor, multi-racial suburbs.

So far the rapid, television-propagated contagion of riots from suburb to suburb, seen in October and November 2005, is not being repeated. People who know the mood of the banlieues point out that retirement at 62 is not the most conflagatory issue in quartiers difficiles where youth unemployment runs at up to 70 per cent.

But the core government versus unions dispute remains intractable and unpredictable. With one third of the nation's 12,000 petrol stations still dry, small businesses, farmers, flower and greenhouse vegetable growers, road hauliers and the tourist industry are beginning to issue howls of distress. Unless the week-old strikes and blockages at oil refineries and fuel depots are lifted within days, they say, they face economic disaster.

Tens of thousands of foreign and French tourists are cancelling holidays. Even the fearless Lady Gaga cancelled two shows in Paris this weekend. As the government hoped, there are signs that public opinion – full-square behind the strikes and protests until now – is beginning to shift. Support for continuing action, which was more than 70 per cent last week, has slumped in recent polls (although it remains at more than 50 per cent).

The petrol shortages have angered ordinary people. So did the sight, on the television news, of air passengers carrying their bags the last kilometre to Paris-Orly and several regional airports to beat union barricades. The "right" to strike and the "right" to retire at 60 are fiercely defended in France. So is the "right" to go on holiday.

President Sarkozy, perhaps sensing a change in the wind, hardened his tone yesterday. He accused the militant union branches who are blockading oil refineries and fuel depots of "taking the country hostage". He lumped the militant anti-pension reform protesters together with the casseurs (vandals) who looted shops and burned cars in Lyon.

"It is not these casseurs who will have the final word in a democracy, in the Republic," he said. "We cannot be the only country in the world where, at any mention of reform, a minority blocks everyone else."

In other words, Mr Sarkozy came close to posing the question that Margaret Thatcher posed in Britain in the 1980s: "Who runs this country, the unions or the government?" In terms of the recent history of social reform in France, that is almost a revolutionary question – with the President threatening to lead the Revolution.

But will he? There has been much talk from the government in recent days of "forcing open" all the fuel distribution depots and of "requisitioning workers" to open up the 12 striking oil refineries. In practise, the authorities have been content to play cat and mouse with the militant union branches. For every oil depot opened up by police, another has closed down. All 12 refineries are still on strike.

Although the authorities insisted said that petrol and diesel were beginning to reach the pumps, parts of the country (especially Normandy, the greater Paris area, and Picardy) were still short.

Instead of attacking the militant union branches head on, Mr Sarkozy has, so far, been talking tough and hoping the anti-pension movement will splinter and subside. The movement is internally divided and may yet splinter but refused to subside yesterday.

A meeting of the eight different French trades union federations last night called for two further days of public sector strikes and marches next Thursday and Saturday 6 November.

Three of the more "moderate" federations – those representing executives and white collar workers and the broader-based Confédération Française Démocratique du Travail (CFDT) – have been making unhappy noises about the direction of the dispute. They fear that the petrol blockages and the violence of disaffected suburban youths will puncture public support for the anti-reform movement and hand Mr Sarkozy a moral victory. Their preferred strategy is continuing one-day protests in the hope of building enough democratic opposition to oust Mr Sarkozy in 2012.

The oil strikes and blockages, and rolling railway and electricity strikes, are not part of the "national" protest but separate actions run by militant local branches. In truth, without the oil blockages, this rolling strike "movement" would scarcely exist. Workers in traditionally "militant" industries, such as the railways, have been going back to work in droves this week. The state railways, the SNCF, said 87 per cent of its employees were at work– enough to run an almost normal service.

The government's other great hope is that the protest movement will deflate once the pension law (increasing the normal retirement age from 60 to 62 by 2018) clears all parliamentary hurdles. A kind of guillotine motion was introduced in the upper house, or Sénat, last night to end the filibustering of opposition parties and explode all 250 or so remaining amendments with one vote. The amended law would still have to go back to the National Assembly early next week.

How and when the dispute can end remains unclear. France appears to have reverted to type: electing a reforming leader and then declaring itself "shocked!" when he tries to reform the country.

Things are not quite that simple. The country was broadly keen on, or resigned to, reform after Mr Sarkozy's election in 2007. This has been dribbled away by the President on a series of jumbled reforms and by his own erratic and vain posturing.

When his popularity fell earlier this year, Mr Sarkozy launched the pension reform (previously little mentioned by him) as a way, he hoped, of claiming a relatively simple markets-pleasing "victory" over the unions. Similar reform could have been achieved by negotiation with the moderate unions. He preferred confrontation.

In the summer, he made an electoral calculation to please the hard right by starting an offensive against Roma gypsy immigrants from eastern Europe. Instead of creating a climate of purposeful calm in which to edge through his reforms, Mr Sarkozy generated a national mood of tension and self-righteous anger which has been exploited by militant union branches and by the Far Left.

Mr Sarkozy may yet be able to claim a "victory" of sorts but it will – paradoxically – have been handed to him by the excesses of union militants and the blind violence of disaffected suburban youth.