Is a new pension reform inevitable in the short term? Barely a year after the latest reform came into force, the question is already being asked. The latest projections from the COR (Pension Guidance Council) show a slight imbalance in the system in 2024, around 0.2% of GDP, which represents a deficit of between 5 and 6 billion euros. And the trajectory is not expected to improve, as this range would double by 2030 and the imbalance would end up reaching 0.8% of GDP by 2070.
The president of the Retirement Guidance Council also recalls that the increase in the legal retirement age from 62 to 64 years actually only affects 60% of employed people: the remaining 40% will leave earlier due to long-term career plans or due to the consideration of certain criteria of arduousness.
An increase in annual tax revenues of 140 billion euros with an employment rate of over 80%
According to Gilbert Cet, the main aim of the pension reforms is not to make the pension system sustainable, as the executive has tirelessly explained throughout 2023. The president of the COR believes that the real objective of these reforms is to increase the employment rate, which remains below 70% in France, far from the statistics observed in Germany or in the Nordic and Scandinavian countries. “This is the origin of all our difficulties in terms of public finances, long before the difficulties in financing pensions,” he insists.
If France were to increase its employment rate from 69% to 82%, as is the case in the Netherlands, “the resulting increase in GDP would lead to an increase in tax revenues of 140 billion dinars. ‘euros per year’ according to Gilbert This forecasts. “This is more than the budget for National Education and Defence combined,” he says.
To increase the French employment rate, the CoR president recommends focusing on three sectors in which France is lagging behind its neighbours: the elderly, young people and also the low-skilled.
“It is a multi-pronged effort that must be made to give France the means to undertake truly ambitious reforms,” stresses Gilbert Cela, who cites the projects for the national education and health systems. “To have these means, there is no other solution than to work harder, like other countries that are not hell on earth do.”
Source: BFM TV
