the pressure comes also (and mainly) from Europe
For Gabriel Attal, the Minister of Public Accounts, the opportunity was too good to pass up. As the Senate voted this weekend, an amendment on pensions that provides for the increase of the legal retirement age from 62 to 64, the Macronist minister reiterated this Monday to the BFM the full intention of the government to carry out the reform. Gabriel Attal saw in the senatorial vote – the majority of which was on the right – a positive sign: the presence of a possible majority on this explosive subject. In Bercy, Bruno Le Maire also defends this line. The Minister of Economy has long pleaded the need for pension reform. Certainly, at this moment, the government will not maintain this amendment by the senators, preferring to continue the consultation with the unions. But, in accordance with the wishes of Emmanuel Macron, he is still focused on the adoption of a quick reform: presentation of a text in early 2023 for entering the application next summer.
A budget requirement for the executive but not only…
For the general public, the financial argument is regularly put forward by the executive to raise the starting age in France in the private sector to 64 years old. According to a study by the Treasury, the revenue income will be 12 billion euros from 2027 – that is, the money that will enter the coffers through pension contributions – and the savings, – in less pensions to be paid , etc. – , will be around 8 billion euros on the same date.
But another less heard element for public opinion has largely played to persuade the government to hold its line: the pressure from our European partners. “The pension reform is a big marker for them, they are waiting for France to develop on this subject”, assured a minister. And to add: “The exclusion of the French from leaving the 62 is very annoying to them. And this is nothing new. In Germany, which, during Angela Merkel, the Chancellor sent the message to Paris as soon as possible : the French should work longer”.
As a reminder, in three quarters of the countries of the European Union, the retirement age reaches or exceeds 65 years. In recent years, most European governments have carried out tough reforms on their fellow citizens, not without facing social opposition.
Indeed, “France seems to be lagging behind, lax, lazy, doing nothing”, continued another influential member of the government. And to confess: “Especially because every year, almost speaking, we tell Brussels that we will speed up the movement, then we go back on our promise … because one year, there are yellow vests, another, it is covid , after inflation…they are losing patience”. In the document sent by Paris this summer to Brussels, France also pledged to implement two important reforms: unemployment insurance, which is about to be adopted, and pensions…
The pressure of our first economic partner: Germany
So, Germany is on the front line to ask France to step up a gear. It must be said that throughout the Rhine, the Germans worked longer than the French. They rarely leave before 65, the legal retirement age, which will be raised to 67 in 2029.
Last spring, three influential German economists – Bernd Raffelhüschen, Stephan Kooths, and Gunther Schnabl, even proposed to raise the retirement age to 70, especially to “absorb the shock of inflation”, which in Germany exceeds 10 % .
And for good reason, in Germany too, the question of financing is an explosive topic. With an aging age pyramid and a low birth rate, the country needs to recover money. In June 2021, an independent report from the Ministry of the Economy estimated that the need for pension financing could represent 45% of the state budget, compared to a quarter in 2019.
If Chancellor Olaf Scholz does not plan to review the 67-year-old threshold immediately, fearing social unrest as recession looms in Germany, he is less tolerant of France’s wait-and-see position .
At a time when the Franco-German couple is struggling, when Germany is looking more to the United States or China, this topic of pensions can become annoying to the couple who are pillars of the Union. On the occasion of the G20, which will be held this week in Bali, the Chancellor will not fail to remind Bruno Le Maire or Emmanuel Macron of the commitment made by France in this file.
But the French were still agitated against a reform
Meanwhile, in French public opinion, the idea of postponing the age to 64 is far from unanimous. In the polls, only retirees – therefore those who are less concerned about a possible reform, and more concerned about the value of their pensions – say they are in favor.
Unsurprisingly, unions continue to show their hostility. Sunday November 13, Philippe Martinez, the leader of the CGT, warned: he promises important mobilizations if the government changes the age of departure. Even for employers, retirement is (no longer) the primary concern. Business leaders are more open to the government tightening unemployment insurance rules – to ease recruitment and ease tensions over labor shortages, or to help pay rising energy bills which threatens production.
Despite the insistence of our European partners, however, the pill promises to be difficult to pass. In a context of inflation and declining purchasing power, households may not accept the additional effort that would be required of them to work longer.