The French government is introducing new plans to update the pension system. Analysts expect a backlash from some workers.
NurPhoto | NurPhoto | Getty Images
french president Emmanuel Macron Going at it again: A new pension reform will be introduced on Tuesday, and expect to face some backlash.
Macron is serving his second term as French president, but overhauling the pension system has been a long-standing promise since he was first elected in 2017.
France’s legal retirement age is currently 62 – lower than in many developed markets, including most of Europe and the US. There are also “special rules” or sector-specific deals in the public sector that allow workers to retire before age 62.
end of 2019In 2010, Macron’s government proposed a single, points-based system that enabled a person to retire after gaining a certain number of points. The idea was to harmonize rules across all sectors.
But the plan faced an uproar. Public sector workers – arguably the ones most hurt by the potential reforms – protested for several days in some Country’s biggest strike in decades, in the midst of such fierce opposition and coronavirus Due to the pandemic, Macron decided to put the plans on hold for early 2020.
This year will be one of pension reforms.
Emmanuel Macron
president of france
There was talk of revisiting the plans in early 2022, but it was deemed too close to the presidential election, which took place in April last year.
“This year will be one of pension reform, which aims to balance our system in the years and decades to come,” Macron said. new year address,
“As I promised you, this year will truly be one of pension reform, which aims to ensure the balance of our system for years and decades to come.”
He said he wanted to finish talks in time for new rules to come into force from the end of summer 2023.
“There will be disruption, there will be strike, [but Macron] “The decision has been made to go faster: The current process should not last more than 90 days,” Renaud Foucault, senior lecturer in economics at Lancaster University, told CNBC’s “Squawk Box Europe” on Tuesday morning.
“Could be quick and dirty, but much more likely than five years ago,” he said.
Etienne Olean, a sociology professor at the Ecole Polytechnique, told CNBC’s Street Signs on Tuesday that Macron “is keen to maintain the image of a reformist president.”
His first term was dominated by major reforms, touching items such as labor laws and taxation.
what to expect
One of the main issues will be the new retirement age. In the past, Macron suggested it could be increased from 62 to 65, but gradually with an increase of about 4 months per year until 2031.
French media have reported that the government is considering raising the amount of the lowest pension recipient in an effort to make longer working lives more acceptable to the public. CNBC could not independently verify this information.
Macron’s first proposal, from 2019, was also envisaged to address the so-called “special regime”.
Any new changes to these agreements are likely to elicit a reaction from the affected industries.
France’s relatively low retirement age is a strain on its public finances. The country’s pension advisory council has reportedly projected a shortfall in the pension system of around 10 billion euros ($10.73 billion) each year between 2022 and 2032.