French Government Ready to Negotiate End to Strike : Europe: But Paris won’t budge on the heart of its plan to overhaul its costly social security system.

Reacting Saturday to plunging public morale, the French government said for the first time that it was ready to negotiate an end to a crippling public workers’ strike.

Still, the government said it wouldn’t budge on certain points, and the impasse continued on the 16th day of a walkout that has stripped France of public transit and other essential services.

The head of France’s largest labor union stalked out of talks with the labor minister after just 20 minutes, demanding an audience with Prime Minister Alain Juppe, who has kept his distance from the dispute.

“At this stage of the conflict, the only one qualified to open true negotiations is the prime minister,” said Louis Viannet, secretary-general of the General Confederation of Workers.

Government spokesman Alain Lamassoure said Juppe’s administration stood “absolutely open to negotiation” on unspecified side issues of the stalemate, which has also affected mail delivery, hospitals and schools.

The government is seeking to retool its costly cradle-to-grave social security system to cut spending, a necessity if France is to participate in a single European monetary system expected by 1998.

The government’s tactical shift was highlighted Saturday by its use of the term “negotiate” rather than “dialogue,” which it has used in the past.

“The hand is extended,” Lamassoure said. “It’s necessary to know if the other side is going to know how to grab this hand.”

But Labor Minister Jacques Barrot warned that the government would not negotiate the heart of the overhaul plan, including an extension to 40 years from 37 1/2 years the tenure required for rail workers to qualify for full retirement benefits.

The government’s intransigence on the point sparked defiance among some labor leaders, including Bernard Thibault, who called for more large-scale protests like the ones that have filled the streets with hundreds of thousands of French in recent days.

“It’s an even larger mobilization that we need in the next few days to change the government’s mind,” said the leader of striking railway workers.

In Rouen, 60 miles northeast of Paris, striking railroad workers ripped up a section of track Saturday night. They offered strips of the track for $2 apiece, with proceeds going to a telethon for genetic diseases.