Paris Emmanuel Macron let his compatriots know in his New Year’s wishes that this time he was serious about the restructuring of old-age security. “This year will indeed be the year of a pension reform that will ensure the balance of our system in the coming decades,” said the French President.
The French would have to work longer so that the pension could remain affordable in the future. By the end of the summer of 2023, Macron hopes, the new rules should be in the code.
The President put the issue off for a long time, and he broke off a first attempt during his first term in office. Even after his re-election in spring 2022, he initially waited and tried unsuccessfully to find compromises with trade unions and opposition parties.
Now he is venturing into a controversial project that will largely determine whether the self-declared reform president will go down in the history books as such. His government intends to present the plans on Tuesday, which are then to be passed by the cabinet on January 23 and then tabled in parliament.
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The resistance is great. Union leaders are threatening strikes and a blockade of the country. In surveys, a clear majority is against a reform with a higher retirement age.
The opposition is rebelling in the National Assembly, where the president no longer has an absolute majority since the parliamentary elections last June. The restructuring of the pension system is not only the key reform in Macron’s second term. It’s also his biggest domestic risk this year.
Higher retirement age, minimum pension of 1200 euros
The first details of the government plans have already leaked out. The current statutory retirement age of 62 years is to be gradually increased over a period of ten years. Macron’s original goal was 65 years, but most recently his government also spoke of 64 years. Generous opportunities for early retirement are to be abolished for a number of occupational groups.
There should be an exception for the French, who entered working life particularly early and have paid into the pension system for many years. When it comes to the future retirement age, the government apparently also wants to take into account whether someone has worked in a physically demanding job.
The reform project also includes a minimum pension of EUR 1,200 net. In the future, all French people who have worked all their lives but only have a low income should benefit from this. Macron’s government is also considering measures to keep seniors in work longer or to enable them to return to work. Only around 35 percent of 60 to 64 year olds in France are employed.
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So the reform is about much more than just the question of whether the French, like many of their European neighbors, will have to work longer hours. However, the debate mainly revolves around the unpopular increase in the statutory retirement age. For the government, this is a communication problem.
France’s pension system is threatened with deficits in the billions
Macron is trying to paint a picture of “just” reform. In his New Year’s speech, he emphasized not only the improvements in the minimum pension and the consideration of long-term employment histories, but also intergenerational justice: It’s about “handing over a fair and solid social model to our children”.
The president relies on calculations by a government-affiliated panel of pension experts. Although the French pension system ended 2021 with a surplus of almost one billion euros and, according to estimates, should even post a surplus of more than three billion euros for the past year, the Pensions Council warns of a growing structural deficit in pension financing in view of the aging population .
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The French economy also sees an urgent need for action. Geoffroy Roux de Bézieux, head of the employers’ association Medef, recently told the newspaper “Le Journal du Dimanche” about longer working lives: “We have no choice. The demographics are what they are. The number of employees for every pensioner is falling steadily.” As early as 2030, the deficit of the French pension fund could be between 20 and 32 billion euros.
With the reform, Macron wants to send a signal to the EU partners. The French national debt is now more than 110 percent of the gross domestic product (GDP) – that is 40 percentage points more than in Germany. In the coming year, the budget deficit is again expected to be at an estimated five percent of GDP.
The President is pursuing the goal of being back below the three percent limit of the EU debt rules by 2027. His government sees the structural reform of the pension as a way to strengthen long-term confidence in French public finances.
The debate about a higher retirement age has met with resistance from many French people.
(Photo: dpa)
Macron, on the other hand, has been hearing warnings from the union camp for months. The boss of the hard-line trade union federation CGT, Philippe Martinez, predicted a “significant mobilization” of the workforce. The umbrella organization Unsa, which among other things represents employees in the education sector, threatened a “very severe social conflict”. Even the CFDT union, which is considered moderate, has turned its back on Macron. CFDT boss Laurent Berger described the planned increase in the retirement age as a “brutal measure”.
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In parliament, Marine Le Pen’s right-wing national Rassemblement National and the left-wing alliance of the populist Inflexible France party, the Socialists and the Greens are opposed to Macron’s plans. Indomitable France has announced a protest march against the pension reform for January 21st.
The government’s hopes of securing a majority in the National Assembly rest on the middle-class conservative Republicans. But they are reluctant to give their support.
At a New Year’s reception a few days ago, Finance and Economics Minister Bruno Le Maire expressed his astonishment at the attitude of the Republicans. After all, the party campaigned for raising the retirement age during the election campaign. Le Maire called on the bourgeois-conservative MPs to forego political games and to be guided by the “overarching interest of the nation”. This consists in “prompting a reform without delay in order to guarantee solidarity between the generations”.
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