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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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JOHN LICHFIELD

ANALYSIS: Who is winning the battle over French pension reform?

As the French government and unions continue their increasingly bitter struggle over pension reform, John Lichfield looks at who is winning the battle for public opinion and which side will back down first.

ANALYSIS: Who is winning the battle over French pension reform?

Over one million people took to the streets of France again on Tuesday to protest against the “cruelty” and “brutality” of a modest pension reform.

The crowds – 1.27m  in total –  were probably the biggest of their kind since December 1995 when the late President Jacques Chirac was eventually forced to dump a similar (but more radical) change in the French retirement system.

On the other hand, a second 24-hour strike against the wicked notion of working to the age of 64 was substantially weaker yesterday.  Trains, schools, oil refineries, power stations and government offices were disrupted but much less so than on the first “day of action” on January 19th.

Who is winning the war?

The government has certainly lost the communications battle. It had hoped that opposition to its pension reform would be melting by now. The numbers opposing the change have grown on the street and in the opinion polls.

And yet President Emmanuel Macron and Prime Minister Elisabeth Borne show no signs of giving way.

Cold feet among the government’s parliamentary troops and allies on the centre-right will no doubt grow colder. There will be some extra concessions for women who have broken their careers to start families and, maybe, for people who started work in their teens.

But Macron is determined to stand by the “cruel, brutal, unjust” proposal that by the year 2030 French people should work officially until they are 64 – when most Europeans  already work until they are 65 are older.

He has little choice. He has painted himself into a corner.  His second term, scarcely begun, will be a domestic wasteland if he gives way.

We are therefore only at the start of the conflict. There will be two further days of action, or inaction, on Tuesday, February 7th and Saturday, February 11th. The text of the reform will go before the National Assembly on Monday.

The country is likely to be disrupted, periodically and maybe continuously, until the end of March.

Both sides now face awkward decisions on strategy.

The eight trades union federations have been unusually united so far. They have agreed a pattern of one-day strikes and marches of increasing frequency in the hope that rising numbers on the streets will somehow convince Macron that he cannot reform France against its will.

The small increase in the size of marches nationwide on Tuesday was a victory for the unions of sorts. But it fell short of the kind of mass revolt – 1,500,000 or more on the streets – that some union leaders had hoped for.

Radical voices within the union movement, including Philippe Martinez, the leader of the Confédération Générale du Travail (CGT) now suggest that it is time to shift to a strategy of continuous strikes in key industries, from railways to oil refineries to power plants. Some sections of his federation are already threatening open-ended stoppages to try to bring the country to its knees.

It was, they point out, long strikes on the railways and elsewhere which forced Chirac to back down in 1995, not the scale of the marches on the street.

The more moderate union voices, led by Laurent Berger of the Confédération Française Démocratique du Travail (CFDT), say such a strategy would be a calamity. Long queues at petrol stations or a long shut-down on the railways and Paris Metro would anger public opinion.

The February holidays are approaching. A collision threatens between two French popular obsessions: the right to go on holidays and the right to retire early.

If the unions disrupt holiday travel, Berger points out, they will lose the support of part of the public on the sanctity of early retirement.

There is therefore a strong possibility that the united union front will shatter in the next couple of weeks.

Macron also face a strategic choice between soft and hard lines. That choice may already have been made.

Macron and especially his Prime Minister Elisabeth Borne have tried so far to make the consensual argument that reform is needed to make the state French pension system more “fair” and to protect it from eventual collapse. That may be true but it is not immediately true.

Their hope was that voters of the centre and moderate left could be persuaded reluctantly to support a just and necessary reform. That approach has failed.

There are signs that Macron is switching to a different argument.

The French pension system is in permanent, massive deficit – €33 billion a year, equivalent to half the defence budget, is taken from general taxation to stop the pensions system for retired public workers from going bust.

The present system is a kind of official Ponzi scheme which only survives if active workers and their employers  pay the pensions of the retired. But there is a  permanent imbalance, which will grow worse in the years ahead. Only massive subsidies from the taxpayer keep the Ponzi scheme alive.

The pension system therefore acts as a ball-and-chain on the French economy, Macron and his government argue. It needs to be reformed, not just for the sake of future pensioners but for the sake of creating jobs now.

There is a great deal of truth in that. But it is, in French terms, the kind of unashamedly “right wing” or liberal argument, which Macron and Borne had hoped  to avoid.

The new government communications strategy abandons all hope of persuading the broad Left. It is aimed at centre-right voters and especially at centre-right opposition deputies whose votes the government needs to push the reform through the National Assembly.

The centre-right Les Républicains have long made exactly the economic argument about pension reform that Macron is now making. He hopes to galvanise, or embarrass, the waverers in their ranks.

Whether that works any better than the previous “just reform” argument remains to be seen. The French centre-right has never been celebrated for its consistency.

In any case, the government appears to be preparing not just one but two constitutional “jokers” or “trumps” to ensure that it wins the parliamentary card game on pension reform.

On top of Article 49.3 (which allows some legislation to be approved by decree without a normal vote), the government is considering cutting debate in the Assembly to 20 days by using the rarely employed “guillotine” powers under Article 47.1.

Either would be cue for much shrieking by the opposition and much anger, and some violence, on the streets. Macron’s popularity, already shrinking, would doubtless collapse.

In a sense, he has nothing to fear. He cannot run again. Après moi le déluge. It would be left to his potential centrist successors to pick up the pieces in 2027 against an emboldened Far Right.

But what a mess. What extreme methods – and what potentially extreme consequences – to enact what is, in all conscience, a sensible and modest reform.

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