French President must keep explaining pension reality

Almost the only thing clear about the industrial action slowly paralysing France as Christmas approached was that it was going to bring a very unfestive festive season.

25 December 2019
By Simon Heffer

The wave of strikes, over raising the pensionable age for millions of workers, has united everyone – from lawyers and teachers to train drivers and sewage workers; they and their union representatives ruled out a Christmas truce.

In the interests of forcing President Macron to stop implementing his vital reforms, the unions maintain that nothing – not even the comfort of the French people and the huge volume of tourists in France for the Christmas holidays – should stand in the way.

The chaos has been considerable. With more than 800,000 advance tickets already sold for travel over the holidays, rail operator SNCF has said it will deliver passenger to their destination; but it will have its work cut out.

The roads are swamped with traffic, with hundreds of miles of jams reported in the Ile-de-France every day. Retail sales in Paris a week before Christmas were down by 30%; hotel bookings around the capital down by between 30% and 50%.

Such figures exemplify the dilemma that now faces the government – but the President must keep his nerve.

If he caves, and decides not to pursue pension reform, he might get the French economy moving again in the short term, and limit the damage, but his credibility would be wrecked.

Then he would have to rely on getting into the second round of the 2022 presidential election with Marine Le Pen as his opponent – uniting, as the hard-right candidate always does, French public opinion against her – to stand a chance of winning.

Or Mr Macron can stand firm, as Prime Minister Edouard Philippe said he would before negotiations with the unions a week before Christmas.

This carries a risk: because of the breadth of the resistance to his reforms, and because if the unions are not quelled into submission quickly the effect on the French economy will prove devastating.

As the holiday approached, 55% of the French public said they would be angered if industrial action continues through the festive season; they did not specify towards whom that anger would be directed.

Given the general public does not vote on whether to have trades unions, but does get to vote on whether to have Mr Macron as President, the President is likely to emerge as the object of their wrath.

He must argue his case yet more vigorously: there is plenty of ammunition.

As Prime Minister Philippe went into negotiations with the unions in the week leading up to Christmas, he promised that he could ‘ameliorate’ the deal being offered. How he could do this without sacrificing the vital principle – that France is living way beyond its means with its state pension system in its current form – is far from clear.

Last year the state system cost €324.9billion, or 13.8% of the country’s GDP. This compares with an average of 7.5% in other developed countries.

It is so expensive because French state pensions pay out on average 74% of final salary, compared with 29% in Britain; and the cheminots are so militant, because SNCF staff receive 88% of their final earnings, on average.

Worse still for the French finances, the numbers of those claiming pensions is increasing at a much faster rate than those who are contributing to the fund. Such a system easily qualifies for a chapter in the book about the economics of the madhouse.

Conservative commentators in France, always anxious to help rebuild the centre-right at the expense of Macronisme – for which rather too many of their former supporters voted – argue that the President and Mr Philippe have been cack-handed in their approach to the problem, and have not ‘understood’ the French public.

In fact, Mr Macron and his prime minister have understood the French public all too well.

As successive presidents who have tried any reform have found out, many people – even intelligent ones such as the professional people currently protesting and on strike over the pensions plans – do not want to look at reality or listen to reason.

Mr Macron is almost certainly right, on this economic issue, to choose confrontation over debate.

That said, he should be using the media day after day to confront the public with that reality, until at least some of them finally see that he has a point, and that the money is running out.

He is also unlucky that the confrontation has come over Christmas and in the depths of winter, and that the man he charged with implementing the reforms, Jean-Paul Delevoye, had to resign over undeclared conflicts of interest.

The administration has emphasised that the police and military will be exempt from the reforms (as in most other developed countries, not least because the physical fitness required to do such jobs tend to run out by the age of 50).

This, too, has provoked the unions; but one suspects that Mr Macron has made this point so firmly because he knows things could get worse before they get better, and the police and the army may be vital to the enforcement of the government’s wishes.

There is also talk about limiting the right to strike, which also suggests a front-line role for the forces of law and order in ensuring that the law is obeyed.

Meanwhile, Le Figaro newspaper reports that Marine Le Pen has a complete machine in place for her 2022 campaign, and is about to go on the attack.

It is another signal that France begins 2020 as a remarkably unhappy and turbulent nation.

To the regret of those of us who admire the country, the turbulence is very far from over.

 

Simon Heffer, the renowned political commentator and historian, turns his gaze to French politics. Simon Heffer is also a columnist for the Daily and Sunday Telegraphs

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