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JOHN LICHFIELD

OPINION: Macron’s pension reform is wildly unpopular and badly timed – but essential for France

One thing that everyone can agree on is that Emmanuel Macron's new pension reforms are likely to be highly unpopular and lead to strikes and demonstrations - so why is he doing it? John Lichfield looks at the president's thinking and why France, in fact, needs this reform.

OPINION: Macron's pension reform is wildly unpopular and badly timed - but essential for France
Demonstrations against pension reform in France. Photo by MEHDI FEDOUACH / AFP

The Belgians do it until they are 65. The Germans keep going until they are 65 and 7 months. The British manage it until they are 66. But the French – in theory – stop at 62 (and French train drivers give up much younger than that).

We are talking, of course, of work and the minimum legal age at which European countries can retire on a full state pension.  

President Emmanuel Macron is about to declare war on the French people. He thinks that they should work longer. An overwhelming majority of French people – at least 70 percent according to recent polls – believe that they should not.

President Macron decided on Wednesday night to push ahead rapidly with a new version of the pension reform which was abandoned (when close to enactment) in March 2020 because of the Covid pandemic.

Militant trades unions have – by coincidence – organised over 200 demonstrations across the country today to protest against several things, including Macron’s desire to delay the retirement age. That is just a taste of the mayhem to come.

Remember the long rail and power worker strikes of 2019? Or the protests of 1995 which almost brought France to its knees? They were both about pension reform.

You can hear John talking more about pension reform in the latest episode of Talking France – download it HERE, find it on Spotify, Apple or Google podcasts or listen on the link below.

After a meeting with senior ministers and leaders of his centrist alliance, Macron has, for now, put aside the idea of imposing pension reform by Christmas by parliamentary putsch. He will allow two months for discussions on detail – but no negotiation on fundamentals – with the unions.

 A draft law to increase gradually the minimum retirement age to 65, or maybe 64, will be presented in December and pushed through by February. The 2023 budget plan published this week assumes that the first stage in delayed retirement will take effect from July.

Macron no longer has a majority in the national assembly to be sure of enacting pension reform by normal vote. He let it be known today that the government will use, if necessary, its powers under Article 49.3 of the constitution. This allows the government to pass one piece of general legislation by decree in each annual session (and an unlimited amount of financial legislation).

READ ALSO What is Article 49.3? 

Opposition members could block a new pensions law by supporting a vote of no confidence (as is their constitutional right). In that case, Macron warned today, he will dissolve the assembly and force new parliamentary elections (as is his constitutional right).

In other words, Macron is ready to play hard ball.

But does it make sense to play hard ball in such hard times?

My favourite French left-wing politician, François Ruffin, the deputy for the Somme (who is sometime annoying but often practical and sensible) describes Macron’s approach as “an act of madness”.

Ruffin said: “After two years of the Covid crisis, with people exhausted, with Emmanuel Macron re-elected without any momentum or enthusiasm, when people don’t know whether they can pay their bills…in this time of exasperation and democracy fatigue, he is going to defy the vast majority of French people – 70 percent to 80 percent according to the polls – and impose pension reform by force.”

So why is Macron doing it? And why now? The first question is easier to answer than the second.

There are two strong arguments for pension reform in France.

As people live longer, a supposedly self-financing system will start to run into deficit next year. According to the official projections, short-falls as high as €10 billion by 2027 and €20 billion by 2032 will have to be paid out of  taxation or state borrowing.

In other words the pension system – in which pensions are supposedly paid from workers’ and bosses’ contributions – will start to limit other spending or swell the French deficit and debt.

Secondly, there is a strong, economic argument that France should work for longer. It is unsustainable for the French to retire three years (at least) earlier than their European partners and competitors.  

France is not a “lazy” country. Those French people who do work do so very productively.  But, taken as a whole, France works less hours than other nations – partly because of the 35 hour week, partly through unemployment but mostly because of the early minimum retirement age.

According to a OECD study, France worked 630 hours a year per inhabitant in 2018, including children and the retired. Germany worked 722 hours per inhabitant; the UK 808 hours, and the USA 826. 

Macron argues that France can only afford its generous social model and can only compete successfully with its European partners and global rivals if – as a nation – if it puts in more hours.

Both these arguments are admittedly open to challenge. The state pension fund deficit is not as big as was once feared. There is actually a surplus this year because so many old people died during the Covid pandemic. In the long run, however, the deficits will grow.

The economic argument can also be quibbled with. Many French people already work beyond 62; many other older people would like to work but can’t find jobs.

In the medium to long term, however, the arguments for pension reform are as powerful as Macron says. But that leaves the question: “why now?” 

Does not France, and the world, have problems enough this winter without Macron picking a huge new fight on the French retirement age?

The President argues that he was given a “mandate” for pension reform by his victory in the presidential election in April. That is dubious. It would be more accurate to say that he lost his parliamentary majority in June because voters detested the idea of working for longer and Macron failed to make the argument why they should.

Now, after a period of drift, the President has decreed that pensions will be the ground on which he fights for a domestic legacy.

Despite a first term disrupted by Covid, despite the loss of his parliamentary majority, Macron wants to be the first President for half a century to leave France stronger than he found it – whether France likes it or not.

Let battle commence.

Member comments

  1. You could also say, ‘If not now, when?’ The reforms were abandoned in 2020 because of the Covid crisis. Undoubtedly another crisis will come along that will serve as a reason for inaction. French people have got to face up to the unsustainability of the current system – as you say, whether they like it or not!

  2. People will adjust, if given sufficient notice. The shambles of the changes in the UK, meant that some women were within two years of retirement and suddenly, received a letter stating that the state pension would not be paid until they were 66 years old.

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TRANSPORT

Eurostar faces severe disruption at Christmas as staff vote to strike

High-speed train operator Eurostar will face security staff walkouts that will "severely" disrupt busy Christmas services, their trade union said on Wednesday.

Eurostar faces severe disruption at Christmas as staff vote to strike

Eurostar, which links London with Paris and Brussels, is the latest firm hit by strikes as salaries fail to keep pace with rocketing inflation in a cost-of-living crisis.

The RMT rail union said in a statement that members working as Eurostar security voted overwhelmingly to strike on December 16th, 18th, 22nd and 23rd.

“The strike action will severely affect Eurostar services and travel plans for people over the December period,” it added.

More than 100 staff had voted “emphatically” to reject a pay offer that was below inflation.

The RMT added that the security workers are employed by facilities contractor Mitie.

“Security staff are essential to the running of Eurostar and it is disgraceful they are not being paid a decent wage,” said RMT general secretary Mick Lynch.

“I urge Mitie and Eurostar to come to a negotiated settlement with RMT as soon as possible.”

Britain faces a grim winter of discontent this year as strikes multiply across public and private sectors as pay is eroded by surging consumer prices.

Ambulance workers on Wednesday joined nurses in voting to go on strike ahead of Christmas.

Numerous other staff, from lawyers to airport ground personnel, have also held strikes this year as Britain contends with its worst cost-of-living crisis in generations.

UK inflation accelerated in October to a 41-year peak at 11.1 percent on runaway energy and food bills.

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