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French pensions: What does Macron want to change?

The issue of pensions has come roaring back into the political debate after Emmanuel Macron announced plans to raise the pension age - but what is being proposed and why is it controversial?

French pensions: What does Macron want to change?
French workers protest over changes to the pension system. Photo by Lionel BONAVENTURE / AFP

A few weeks before the first round of voting in the French presidential elections, president Emmanuel Macron made the bold/foolish announcement that he wanted to raise the pension age from 62 to 65.

After winning a narrow victory in round one, and facing far-right candidate Marine Le Pen in what is predicted to be a close contest in the second round – he now appears to be backpedalling slightly, saying the age rise is “not a dogma”.

So here’s what is happening with French pensions, and what could change.

What does Macron propose?

Macron initially proposed raising the standard pension age from 62 to 65, which would still make it one of the lower pension ages in Europe.

Faced with public hostility, he now says he would be willing to compromise on 64 instead of 65, slow the pace of the introduction and maybe throw open the whole question to a referendum.

What does Le Pen propose?

His far-right rival wants to go the other way – she wants to lower the pension age from 62 to 60 for those who started working before the age of 20.

Essentially, she proposes that a pension be based on 40 years of contributions, rather than a fixed age.

Neither Macron nor Le Pen have proposed any details on changes to the pension system itself, just the qualifying age.

Didn’t we already have a big pension reform?

Yes and no. 

During the first term of his presidency Macron brought forward proposals on a major shake-up of the pension system. It left the standard pension age at 62, but axed the ‘special regimes’ which allow certain professions, including rail workers, to retire from age 55.

Macron’s reform streamlined the 42 different pension systems that exist in France into a single system and did away with many of the historic benefits that certain workers enjoyed under their special regimes.

For certain groups, including the self-employed, farmers, and women who had had a career break, the new pension worked out higher than the old. But it also meant that many people would end up working for longer.

The proposal was not popular and resulted in the longest transport strikes since 1968.

Despite the unrest, Macron’s government managed to push through their controversial changes – but then the pandemic hit and they were never brought into effect.

They’re still approved though so Macron could, if he wins re-election, activate them later this year.

Or he could start again with the reforms, this time looking at pension age as well.

If Le Pen wins she could start pension reform, but her proposals are really only at the ideas stage and would have to go through the lengthy process of consultation, drafting legislating and then getting it through parliament.

How do French pensions work?

The French pension system is a state-run contribution system.

Every worker in France, whether an employee or self-employed, pays a contribution into their pension every month. This is compulsory.

When they get to retirement age, they then claim a pension based on the contributions they have made over the years and the ‘regime’ that they are covered by.

There is a minimum pension amount, currently around €900 a month but some people who have ‘incomplete careers’ – ie are retiring before the official retirement age or who had a career break, get less than this. They would usually be entitled to top-up benefits.

Private pensions are rare in France. 

Does the system need reform?

In common with most western countries, people in France are living longer and therefore claiming pensions for longer, making the pension system more expensive.

The French pension system is in deficit, but opinion is divided on how serious this is and how urgently reform is needed.

Macron’s finance minister Bruno Le Maire says: “The survival of the retirement system as it is is at stake.”

Macron himself says: “I could tell you, if I were a demagogue and wanted to get elected, ‘we’re going to retire at 60’, but who finances it? You pay more in pension contributions and you reduce the standard of living, or you ask pensioners to lower their pensions – I’m not a magician.”

Unions, on the other hand, say the deficit is relatively small and there is no urgent need to reform. 

While the majority of pension funds have a deficit, some funds are in credit.

The Conseil d’orientation des retraites – the body that oversees pension regimes – says the deficits are not, yet, at emergency levels but cannot be allowed to continue to grow. 

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POLITICS

Prosecutors: No new rape inquiry for France’s disabilities minister

France's disabilities minister will not face a new inquiry "as things stand" over a rape allegation that surfaced just after his nomination by President Emmanuel Macron last week, prosecutors have said, citing the anonymity of the alleged victim.

Prosecutors: No new rape inquiry for France's disabilities minister

Damien Abad has faced growing pressure to resign after the news website Mediapart reported the assault claims by two women dating from over a decade ago, which he has denied.

One of the women, identified only by her first name, Margaux, filed a rape complaint in 2017 that was later dismissed by prosecutors.

The other woman, known only as Chloe, told Mediapart that in 2010 she had blacked out after accepting a glass of champagne from Abad at a bar in Paris, and woke up in her underwear in pain with him in a hotel room. She believes she may have been drugged.

She did not file an official complaint, but the Paris prosecutors’ office said it was looking into the case after being informed by the Observatory of Sexist and Sexual Violence in Politics, a group formed by members of France’s MeToo movement.

“As things stand, the Paris prosecutors’ office is not following up on the letter” from the observatory, it said, citing “the inability to identify the victim of the alleged acts and therefore the impossibility of proceeding to a hearing.”

In cases of sexual assault against adults, Paris prosecutors can open an inquiry only if an official complaint is made, meaning the victim must give their identity.

Abad has rejected the calls to resign in order to ensure the new government’s “exemplarity,” saying that he is innocent and that his own condition of arthrogryposis, which limits the movement of his joints, means sexual relations can occur only with the help of a partner.

The appointment of Abad as minister for solidarities and people with disabilities in a reshuffle last Friday was seen as a major coup for Macron, as the 42-year-old had defected from the right-wing opposition.

The new prime minister, Elisabeth Borne, said she was unaware of the allegations before Abad’s nomination, but insisted that “If there is new information, if a new complaint is filed, we will draw all the consequences.”

The claims could loom large over parliamentary elections next month, when Macron is hoping to secure a solid majority for his reformist agenda. Abad will be standing for re-election in the Ain department north of Lyon.

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