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POLITICS

Macron to restart discussions over France’s controversial pension reforms

The potentially explosive subject of pension reform is back on the table in France, with president Emmanuel Macron hosting a meeting with unions on Tuesday to discuss changes to the country's retirement system.

Macron to restart discussions over France's controversial pension reforms
A protest against Macron's proposed pension reform in March 2020. Photo: Bertrand GUAY / AFP.

The aim of the meeting is to “discuss solutions to the great challenges”, including “building strong and sustainable growth”, “promoting the economy’s green transition”, and “preparing for demographic challenges”, the Elysée told AFP, but it’s the topic of pension reform that is already garnering the most attention.

Hundreds of thousands of people took to the streets in December 2019 and January 2020 to protest over planned pension reforms, and a series of transport strikes brought the country to a halt.

The government was able to push the bill through parliament despite this fierce opposition, before shelving the reform at the start of the pandemic to focus on the country’s economic recovery.

However the issue is now back on the table – but reports suggest that rather than simply discussing when the previously agreed reforms should begin, Macron intends to introduce a different set of reforms.

Last month, Macron said he had no plans to pick up exactly where he left off. “I do not think that the reform as it was originally envisaged can go ahead as such,” Macron told reporters.

“It was very ambitious and extremely complex and that is why it generated anxiety, we must admit that. Doing it right now would mean ignoring that there are already a lot of worries.”

What changes?

It’s not clear exactly what would be changed in the new proposals

Had it been implemented, the 2019 reform plan would have created a universal points-based pension system to replace the country’s 42 different pension schemes.

It would also have created a “pivot age”, meaning the legal retirement age would remain 62, but most people would have to work for two more years to be entitled to a full pension, as well as abolishing some of the ‘special regimes’ that allowed, for example, train drivers to retire at 55.

Last week, Les Echos revealed that economy minister Bruno Le Maire is among those in government now pushing for a total change to the retirement age – moving it from 62 to 64.

The change would be gradual, with those born in 1961 retiring at 62.5 in 2022-2023, and every subsequent age group working six months longer, until those born in 1964 can retire at 64 in 2028-2029, according to Les Echos.

READ ALSO How do pensions in France compare to the rest of Europe?

What do other politicians say?

Apart from the push from those within his own party, Macron may also be feeling the pressure ahead of the presidential elections in 2022.

The Republican party’s Xavier Bertrand, who is seen as a potential threat from the centre-right, told Le Point: “By 2028-2030, we’ll need to work two years longer, until 64, and if life expectancy continues to progress in the following years, we’ll need to go up to 65.”

What do the unions say?

Shockingly, they are not happy.  Ahead of Tuesday’s meeting with the President, some union leaders have warned that they will resist any attempts to raise the retirement age, at a time when the health crisis has caused unemployment to rise.

“If you keep those who have a job in work for two more years, you’re closing the door to those who are looking for work,” Yves Veyrier, head of the Force ouvrière union told Le Parisien.

Speaking to LCI, Philippe Martinez, general secretary of the hard-line CGT union, called the proposed reform “an electoral objective” and said workers would have to mobilise to prevent it should the government decide to pursue the policy.

Geoffroy Roux de Bézieux, head of the MEDEF employers’ union, said he supports delaying the age of retirement, but added that the reform should not be rushed through.

“To implement this reform, you need political capital,” he told Les Echos. “For me, it’s a debate for the presidential election. All the candidates need to position themselves.” 

The legal retirement age was last changed in 2010, when it went from 60 to 62, meaning French workers still retire earlier than most Europeans.

When will we know more?

According to government spokesman Gabriel Attal, Macron will make his plans clear “before July 14th”.

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MONEY

Cutting back and applying for benefits: How the weak pound has impacted Brits living in France

In recent weeks, the pound has become weaker when compared to other currencies, namely the euro. This has made life more complicated for Brits living in France. The Local asked readers to share their experiences - and advice - for others who find themselves in the same situation.

Cutting back and applying for benefits: How the weak pound has impacted Brits living in France

While the pound is still low when compared to other currencies, it has recovered somewhat since its drop after the British Chancellor’s mini-budget.

As of October 5th, the exchange rate was £1 to €1.14. For British people living in France who receive income in pounds sterling – whether they be pensioners or others with financial interests still in the UK – the drop in the pound’s value has had negative impacts.

The Local reached out to readers to hear how they have been affected by the exchange rate. Many offered their tips for navigating the current economic landscape.

Many readers found life still affordable, but expected to be more severely impacted in the future. Retiree A. Wood, who lives in Haute Vienne, said that “The recent drop in the value of the pound will not immediately affect me. If it remains low for more than a year then maybe I will have to do some calculating.”

Pensioners especially said that life in France had become “more expensive” and “costlier” for them, but being aware of price rises and managing the changes “with care” were plausible solutions for the time-being.

In general residents of France are better protected from inflation than many other European nations, thanks to government initiatives such as energy price caps and fuel rebates, but prices for many everyday items such as food have been rising steadily.

One respondent, Nigel Harrison, a retired former business consultant, said that weak pound has “not made life unaffordable, but worrying.” 

Meanwhile, some readers, all of whom are also retired, said that they were starting to feel more serious impacts of the exchange rate.

Retired librarian and micro entrepreneur, Pat Hallam, who has been living in Paris for the last two years, said that she receives her career pension in pounds, which she later transfers into euros by way of her French bank account.

She explained that she already works to supplement the cost of life in Paris, but now she expects to have to take on extra work.

She expects to also “cut back on things like socialising, eating out and culture.”

“Explaining this to friends will be hard, and it is what makes living in Paris a pleasure. I know the cost of living would be cheaper in other parts of France, but I’ve spent the last 2 years building a life in Paris, my dream destination. I would be very disappointed if events across the Channel forced me to move away, or even back to the UK,” she said.

READ MORE: The best banks for non-EU citizens living in France

Pat is not alone – Tom Baker, who is retired and lives in south-west France – said, “All my pensions are from the UK and the drop in exchange is definitely felt, coupled with the loss on transferring the money to France as I have five pensions.”

Baker explained that having his income drop has been particularly difficult “as a 74 year old with two young sons aged seven and 10” and amid “the present financial climate the cost of everything is spiralling.” 

Many readers said they would try to live on savings while waiting for the value of the pound to rise again, which has also posed its own problems, as many British bank accounts have begun closing the accounts of non-UK residents. 

John Stanley Mumford found himself in this situation, he said: “I have a pension in pounds. I will live on savings until the value of pound goes up! But, Barclays bank is to close my account as I am a French resident, so basically I’m stuffed!”

READ MORE: Banking giant Barclays to close all accounts of Brits living in France

Non-pensioners have also felt the impacts of a weak pound. One respondent discussed the dilemma of attempting to sell their UK home, and worrying about whether they should leave the money in pounds or transfer it to Euros afterwards. Others worried about their UK savings accounts.

Respondents did offer helpful advice for others in similar positions – ranging from tips to try to hold out for a better exchange rate to recommendations for how to become thriftier – like getting rid of unused streaming services and cutting back generally. 

Tom Baker said he recommends transferring funds “perhaps every three months to reduce the cost of transfer fees, which since Brexit have really increased.”

He also said that he checks the daily rate “for a week or 10 days before the transfer is needed to try and get a better each rate.” Others said if possible – wait until the pound recovers.

However, for those unable to hold out until the pound is stronger, several readers recommended apps and international banking services, such as Wise and Revolut as handy ways to find better exchange rates and avoid high fees when transferring between a UK bank and a French one. 

Finally, Pat Hallam counselled Brits living in France to consider applying for welfare benefits if necessary. She said even if you’ve never considered it, “either out of pride or because you didn’t think you were eligible, maybe now’s the time to look again.”

She also recommended tracking energy use more carefully via a smart metre: it “takes three months’ use before you can start comparing consumption but it helps keep track of your energy use.”

READ MORE: Living in France: How to cut your household energy use by 10% this winter

Many thanks to everyone who took part in our survey and shared their experiences and tips.

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