French PM unveils pension changes, unions call for strikes

Jan 9, 2023, 10:47 AM | Updated: Jan 10, 2023, 11:54 am
French Prime Minister Elisabeth Borne delivers her speech during a press conference in Paris, Tuesd...

French Prime Minister Elisabeth Borne delivers her speech during a press conference in Paris, Tuesday, Jan. 10, 2023. Borne is unveiling a highly sensitive pension overhaul aimed at pushing up the retirement age. It has already prompted vigorous criticism and calls for protests from leftist opponents and worker unions. (Bertrand Guay, Pool via AP)

(Bertrand Guay, Pool via AP)

PARIS (AP) — French Prime Minister Elisabeth Borne on Tuesday unveiled a contentious pension overhaul aimed at raising the retirement age from 62 to 64 by 2030, which prompted vigorous calls for strikes and protests from leftist opponents and labor unions.

Speaking in a news conference in Paris, Borne said the minimum retirement age to be entitled to a full pension will be gradually increased by three months every year, starting this year, in line with a longstanding pledge by President Emmanuel Macron.

In addition, people will need to have worked for at least 43 years to get a full pension, starting from 2027, she said.

“Working more will allow future retirees to get higher pensions,” Borne said.

“By 2030, our system will be financially balanced,” she added.

Those who started working before the age of 20 will be able to get early retirement, Borne added. Specific categories of workers such as police officers and firefighters will also be able to retire earlier.

The government argues that French people live longer than they used to and therefore need to work longer to make the pension system financially sustainable. All French workers receive a state pension.

Center-left and hard-left labor unions unanimously expressed their disapproval of the proposed changes after talks with Borne last week. Some are in favor of an increase in payroll contributions paid by employers instead.

The country’s eight main labor unions announced a national day of strikes and protests on Jan. 19.

Laurent Berger, head of the CFDT union, denounced “one of the most brutal pension reforms of the past 30 years.” Philippe Martinez, secretary general of the CGT union, urged workers to “go on strike that day and the next days,” adding that the union is “committed to prevent that bill from passing.”

A heated debate in parliament also is to be expected, starting next month.

Macron’s centrist alliance lost its parliamentary majority last year — and most opposition parties are opposed to the changes.

Borne vowed to seek “compromise” with some other political groups. Macron’s centrist lawmakers hope to be able to ally with members of the conservative The Republicans party to pass the measure.

The president of The Republicans’ group at the Senate, Bruno Retailleau, appeared satisfied with the planned changes, saying on Twitter that “the reform proposed by Elisabeth Borne echoes the one we vote at the Senate.”

Otherwise, the government may use a special power to force the law through parliament without a vote — at the price of much criticism.

The pension reform is an electoral promise from Macron, who failed to implement a similar measure during his first term. The proposal at that time sparked nationwide strikes and protests, before the COVID-19 crisis led the government to postpone the changes. Macron was reelected for a second term last year.

France’s Retirement Guidance Council issued a report last year showing that the pension system is expected to have a deficit over the next decade, with the government having to compensate.

France’s main MEDEF employers’ union issued a statement welcoming “an indispensable reform to save our pension system.”

The minimum retirement age applies to people who have worked enough years to qualify. Those who do not fulfil the conditions, like many women who interrupt their career to raise their children and people who did long studies and started their career late, must work until 67 to retire without penalty.

The average pension this year stands at 1,400 euros ($1,500) per month once taxes are deducted. But that average masks differences across pension schemes depending on professions.

Borne said the reform will allow the minimum state pension for low-income workers who have a full career to increase by 100 euros ($107) on average, reaching about 1,200 euros ($1,288) per month.

Over the past three decades, French governments have made numerous changes to the system but each reform has been met with massive demonstrations.

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French PM unveils pension changes, unions call for strikes