“I am very well aware that changing our pension system will raise questions and fears among the French,” said Prime Minister Elisabeth Borne on Tuesday. It is now the task of the government to gain support from the population. “If you work more, future pensioners can receive higher pensions,” Borne started with an attempt to convince.
Parallel to the increase in the retirement age, the contribution period is to increase to 43 years earlier than previously planned. At the same time, the minimum pension is to be increased to EUR 1,200, possibly retrospectively. A corresponding legislative proposal is to be submitted to the cabinet on January 23 as part of a supplementary budget for social security and to be passed by the summer.
Government argues with longer life
The reform has been in the air for years, but has not been implemented. Macron canceled an earlier attempt in light of the coronavirus pandemic. The French are currently retiring early compared to other industrialized countries. According to the Organization for Economic Cooperation and Development (OECD), the EU country spends almost 14 percent of economic output on pensions.
Borne said at a press conference that the system would be financially balanced by 2030. The government argued that the French are living longer than they used to and therefore need to work longer to keep the pension system financially sustainable. All French employees receive a state pension.
According to an Odoxa survey, four out of five citizens refuse to retire at the age of 64. Calls for strikes could be more popular than before, as many French people are deeply frustrated by the loss of purchasing power caused by inflation.
“Will oppose this reform”
The reform-oriented trade union CFDT also threatened to protest in advance: “If the retirement age is raised to 65 or 64, the CFDT will do what we promised. We will resist this reform by calling on workers to mobilize,” CFDT chief Laurent Berger said.
France’s Pensions Council published a report last year showing that the system is likely to run into deficits over the next decade. The government spoke of around 20 billion euros that had to be compensated. Over the past three decades, French governments have made numerous changes, but each reform has been met with massive demonstrations.
No majority in Parliament
A further complication for Macron and Borne is that they do not have a majority in Parliament. Macron could try to win conservative Republican MPs over to his side. The right-wing populists from the Rassemblement National described the reform as superfluous, while the left-wing camp described the plans as anti-social.
In the absence of a majority, the Prime Minister could apply constitutional paragraph 49.3, which allows legislation to be passed without a vote if the government survives a subsequent motion of no-confidence.
