French Pension Reform: Macron Gives in to EU Demands
During the European Semester 2019, 17 EU countries received recommendations on the “long-term sustainability of public finances”, and 15 were specifically urged to reform their pension systems. So far, only 6 of them have “explicitly” planned to do so, with the 9 others being late (Czech Republic, France, Germany, Ireland, Italy, Luxembourg, Malta, the Netherlands and Poland).
Since the EU is heading toward a collection of war economies, and birth rates are expected to further decline, the technocrats conclude that their public finances will no longer be sustainable, due due to aging populations. And by ricochet, if the public finances are in trouble, investors will flock to the high interest rates offered by the US, threatening the existence of the Eurozone.
In France, Prime Minister Elisabeth Borne presented the French pension reform plan, that would raise the legal minimum retirement age from 62 to 64 by 2030, beginning September 1, 2023 at a rhythm of 3 months a year. She claimed that would ensure “the financial stability of the pensions system” over the long run.
In response, all eight of France’s main trade unions have called for a day of strikes and protests on Jan. 19, to “kick off a powerful movement for pensions in the long term,” according to their joint statement. While hundreds of thousands will take to the streets, and strikes will paralyze oil refineries, transportation, education and much more, unity among the unions remains fragile, as the two biggest, the CGT and the CFDT, only agree to reject the current plan. The “reformist” CFDT supports the principle of the pension reform, but just not the current proposal as defended by Emmanuel Macron.
The presentation of the reform also prompted vigorous criticism from the leader of left-wing La France Insoumise (LFI) Jean-Luc Mélenchon who described it as a “serious social regression”. The entirety of France’s left, from LFI to the Greens, have called to demonstrate on Jan. 19. Opposition is also coming from the right-wing Rassemblement National (RN), with Marine Le Pen tweeting that “The French can count on our firm determination to block this unjust reform.”
The bill will be presented formally on Jan. 23, before with parliamentary debates scheduled to begin in early Feb. They will be limited to 20 days, confirming the opposition’s charge that the government wants to “stifle” debate. To reach a majority, Macron needs the votes of the conservative Républicains, which they have now pledged to deliver. However, cracks are appearing in their support, since the MPs from rural areas (most of them) realize they will lose their seat to the RN if they vote for the reform. Without a majority, the government could impose it anyway by decree (Article 49-3), but that would demonstrate how unpopular it is.