mead cohen berger shevtsova garfinkle michta grygiel blankenhorn
France Takes Half-Step Toward Pension Reform


In a move calculated to avoid conflicts with France’s powerful unions, the French government announced yesterday a number of changes to the country’s pension system. While the official minimum retirement age of 62 will remain unchanged, the number of years of work required to collect a pension is set to rise from 41.5 to 43 between 2020 and 2035.

Meanwhile, to placate French employers exacerbated by Hollande’s soak the rich approach to taxation, the government has promised to offset payroll tax increases with as-yet-unspecified tax cuts. Still, French business leaders expressed frustration with the narrow focus of changes. They would have preferred to see a major overhaul that focused on structural reforms and benefit cuts. According to the FT:

[T]he measures were quickly denounced by Pierre Gattaz, the new head of Medef, the employers’ confederation. “This is a dangerous reform that is not acceptable to us. In truth it is a non-reform: no structural problem is resolved.”

French businesses won’t be the only ones disappointed by the move. The limited scope of reforms is sure to annoy the Germans, who had pushed the European Commission to recommend more dramatic steps, including raising the minimum retirement age. Yet Hollande’s low approval ratings and the ferocious opposition to change by organized labor would have made any more comprehensive reform politically difficult.

Hollande is in a corner: he knows the country needs major reform to address its budget deficit and pension woes. But he was elected on an anti-Sarkozy platform and has a base that’s dead-set against any cuts to their pensions or benefits. Raising the work requirement a mere 18 months over a 15-year time span falls far short of the reform needed—and such small bore stuff still manages to irritate both left and right.

[François Hollande photo courtesy of Wikimedia Commons]

Features Icon
show comments
  • Pete

    This French pension ‘reform’ is a sad joke masquerading as reform.

    It really is only a fig leaf to kick the can down the road for a few years.

  • Atanu Maulik

    In the war between socialism and mathematics, we all know who wins and yes, the crow tastes bitter, even with good French wines.

© The American Interest LLC 2005-2016 About Us Masthead Submissions Advertise Customer Service