September deadline for pension reform
Majority of French people and unions object to the speed with which retirement reforms are being pushed through
THE MAJORITY of French people and unions object to the speed with which retirement reforms are being pushed through by the government.
Six out of ten people polled for Les Echos newspaper said there was no need to rush, only 34% siding with Budget Minister Eric Woerth (charged by President Sarkozy to oversee the reform) that the principle ideas should be ready by the end of May.
A law would be produced in July ready for parliamentary debates in September and a vote in October.
Unions also say the timetable is too tight and add they will not accept reforms passed by force. While 80% of those surveyed recognise need for pension reform, 58% want to keep 60 as the legal retirement age.
With one of the highest life expectancy rates in Europe, coupled with the right to retire at 60, France is facing a huge pension deficit as more people retire and less workers are left to pay into the system.
Last month a report by the audit body the Conseil d'orientation des retraites predicted the system could lose e72bn to e115bn per year by 2050.
Their figures were contested by unions and business.
“No-one can take these 2050 figures seriously. They are Nostradamus predictions not economic ones,” said the secretary general of the FO union Jean-Claude Mailly. Business federation Medef also said the figures were unrealistic but at least displayed the need to act.
The choices faced by government, business and unions are:
- Drop the level of pensions: This is heavily opposed by unions and the public. French pensions are index linked with prices and salaries.
- Put up contributions: Contested by Medef as employers contributions would make business uncompetitive and would lead to more unemployment.
- Find other funding: The government has already announced it intends to levy a new charge on a specific section of the population to raise funds for retirement. Unions would like to see more charges levied on investments and capital gains.
- Lengthen minimum contribution period: This is already set to rise gradually to 42 years by 2020.
- Raise the legal retirement age: This is opposed by most French people.
The Socialist Party is currently debating its stance on the issue. Leader Martine Aubry three months ago found herself back-tracking on comments that the 60-year legal retirement age could be a point for discussion.
The National Assembly and Senate are also under pressure to reform their system - pension reform “should apply to all” said UMP party leader Xavier Bertrand.
