French pension plan strike, explained

Labor unions in France are holding nationwide marches and strikes against President Emmanuel Macron’s unpopular plans. raise the legal retirement age From 64, 62.

on tuesday he vowed bring France “to a standstill” With the sixth day of protests in the last two months. some protesters have gathered over a million people And they have emerged as a major test for Mr Macron after his re-election last year, according to opinion polls Frequently Shown Most of the people of France oppose his proposal.

After tense debates in the National Assembly, France’s lower house of parliament, lawmakers in the Senate, the upper house, are discussing the bill, and the government hopes to pass it by the end of the month.

Mr Macron and his government say that as life expectancy rises and as the ratio of workers and retirees shrinks, they need to transform France’s pension system to put it on a sound financial footing. Opponents, including the United Front of labor unions, disputed the need for expediency. They say Mr Macron is unfairly burdening retirees and blue-collar workers by refusing to raise taxes on the wealthy.

Neither side has shown any sign of backing down.

Total disruption so far has been limited, with protests and intermittent walkouts by workers at schools, public transport, fuel refineries and other sectors.

The government has made small concessions to garner political support from right-wing lawmakers, but is taking a hard line against unions, which have staged massive demonstrations but have little to show for them.

Some unions are now calling for sustained strikes which could alienate public opinion but increase pressure on Mr Macron. He has said little publicly about pension reform and left his government on the front lines to defend it. But he has put at stake the legacy of his second term in getting it done.

The prospect of pension reform has long been the third rail of French politics, leading to mass protests 1995 And 2010, long before Mr. Macron took office. It is the second time Mr Macron’s pension plans have faced massive opposition.

In 2019, during his first term, Mr Macron attempted an overhaul of France Generous led pension system huge street protest and the grinding strike, which included the longest transportation walkout in the country’s history. After being hit by the coronavirus pandemic, the government put those plans on hold.

There is a key difference between what Mr. Macron did then and what he is doing now: Mr. Macron’s initial project did not include raising the legal retirement age. Instead, he was aiming an overall overhaul About the dizzyingly complex structure of the pension system. The goal was to merge 42 separate pension programs into what he said would be a fair, unified system, using points that employees would accumulate and cash out at retirement. But the plans have left many people confused and worried that their pensions will be reduced.

The latest plans are a more direct attempt to balance the system’s finances by creating French work longer hours, an effort the government acknowledges will be difficult for some but is necessary.

France’s pension system relies primarily on a pay-as-you-go structure in which workers and employers are assessed mandatory payroll taxes that are used for retiree pensions. The system, which has enabled generations to retire with a guaranteed, state-backed pension, will not change.

France has one of the lowest rates the number of pensioners in Europe at risk of poverty, and a net pension replacement rate – a measure of how effectively retirement income replaces prior income – of 74 per cent, According to the Organization for Economic Co-operation and Developmenthigher than the OECD and EU averages.

But the government argues that rising life expectancy has left the system in an increasingly precarious position. In 2000, there were 2.1 workers paying into the system for every one retiree; The ratio had fallen to 1.7 in 2020, and is expected to fall to 1.2 in 2070. according to official estimates,

Antoine Bozzio, an economist at the Paris School of Economics, said there was no short-term “deficit explosion” that urgently needed to be addressed. But “once you have said that the system is not in danger or on the verge of collapse,” he added, “it does not mean that there is no problem” in the long term.

To keep the system financially viable without pouring more taxpayer money into it – something the government already does – Mr Macron wants to gradually raise the legal retirement age by three months every year until it reaches 64 in 2030. A previous change that increased the number of years employees must pay into the system to receive a full pension.

Mr Macron has called the overhaul “inevitable”.

Opponents say Mr. Macron is exaggerating the threat of the projected deficit and refusing to consider other ways to balance the system, such as raising employee payroll taxes, reducing pensions from inflation or providing income support to wealthy families. Or raising taxes on companies.

Making people work longer, opponents argue, would unfairly affect blue-collar workers, who often start their careers earlier and whose average life expectancy is shorter than that of white-collar workers.

“Sixty-four is not possible,” said Philippe Martinez, head of France’s second-largest CGT labor union. told French television In January. “Let them tour a garment factory floor, or a slaughterhouse, or a food-processing industry, and they’ll see what working conditions are like.”

Some worry about being forced to retire later as older adults who want to work but who lose their jobs often deal with age discrimination in the labor market,

The plan’s unpopularity also has much to do with pre-existing anger against Mr Macron, who has struggled to shake off the image of a out of reach “President of the rich.”

By making pensions a cornerstone of his second term – he cannot run for a third consecutive term – Mr Macron has also made them a referendum of sorts on his legacy, and analysts say That he could become a lame president if he fails to reform pensions.

Jean Garrigues, a leading historian of the political culture of France, said, “That’s why not only do they have all the unions, but also a great deal of public opinion against them.” “By tying themselves to the project, opposition to it has kind of increased dramatically.”

The government has announced measures intended to mollify the opposition, such as allowing those who started working at a young age to retire earlier and measures to help seniors stay employed. The government also said it would increase the reduced pension, but after officials admitted there would be a hit for most retirees. Weaker than initially announced,

But those concessions were mostly offered as carrots to garner the support of Republican Party lawmakers – mainstream conservatives whose votes the government needs to pass the bill – and have not placated unions.

Some unions are now calling for longer, more disruptive strikes in key sectors such as transport and energy to force the government out.

Once the Senate votes on the bill, which is expected by Sunday, a joint committee of lawmakers from both houses will work on sorting out their versions of the bill. Thereafter, each house will take a final vote.

But Mr Macron’s party, the Renaissance and its allies are no longer enjoying complete majority in the National Assembly, and would fight to get it passed on his own. He has to rely on Republicans, whose leaders have said they may support the bill.

Mr Macron is expecting protests, as Nicolas Sarkozy did as president in 2010 when he raised the retirement age from 60 to 62 despite major demonstrations.

But some rank-and-file Republicans – and even members of Mr Macron’s party – have expressed discomfort with the current version of the bill, meaning the vote could go down if individual lawmakers oppose constituents. induce them to retreat.

The government can use a rare constitutional tool to pass a bill without a vote – Prime Minister Elisabeth Borne used this tactic several times in the fall to implement finance measures. But the process would expose the cabinet to a no-confidence motion. And using it on such a controversial and consequential law could further escalate tensions on the streets.

continuously Contributed reporting.

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