Emmanuel Macron wants to pick up the pace. After a difficult start to his second term, the head of state intends to go back on the offensive by carrying out a whole series of reforms. Starting with the most sensitive of them: pensions.
Aborted by the health crisis, the project of a universal retirement system based on points is no longer on the agenda. During the last presidential campaign, the president defended the raising of the legal exit age, to 64 or 65 years, compared to the current 62 years. But just a few months after his re-election, the contours of his reform no longer seem so clear.
• A reform discussed this fall?
To ensure the balance of the system, Emmanuel Macron judges, in any case, that the French will have to work longer. Two possible options to achieve this: a postponement of the age of majority or an extension of the contribution period to benefit from a full pension.
Whichever path the executive chooses, the Head of State is determined to quickly address this thorny issue. Because according to him, the pension reform cannot wait: it must come into force “from 2023,” he argued this Monday before journalists from the Presidential Press Association. Although he insists on his desire to act with a “spirit of listening” and “commitment” but also “without taboos”.
Will the reform bill be considered this fall as part of the Social Security budget, as some mostly suggest? This decision “will be” of the government, basically “things do not matter”, said the tenant of the Elysée. But in the event of “generalized obstruction” of the 2023 budget, “it will have no qualms about using” article 49-3 of the Constitution, which allows the approval of a text without a vote of no confidence. The use of a referendum is not excluded either.
• How does the government justify the need for reform?
For the executive, pension reform is not only inevitable but also a priority. Main argument: Due to the aging of the population, the current system is structurally deficient. To resolve this imbalance, “there are not 36 solutions. Either we raise taxes, taxes, which nobody wants, (…) or we let the debt go, it is no longer possible”, or “we work more”, Labor Minister Olivier Dussopt explained last week in France info.
This Tuesday, it was the turn of Geneviève Darrieussecq to defend the need for reform for budgetary reasons:
Finally, Emmanuel Macron’s objective through this reform is to free up budgetary margins to finance, without resorting to debt, other large-scale projects considered essential, such as autonomy, school or even the ecological transition.
• What are the unions and the opposition responding to?
Even before being received on September 19 by Olivier Dussopt to start the discussions, the unions unanimously warned the Government against any measures on pensions that would slip during the debates on the Social Security financing bill this autumn.
Such a decision “would block all other projects,” said Cyril Chabanier, confederal president of the CFTC. “It would be dangerous and would lead to a strong mobilization, demonstrations and strikes”, also warned Michel Beaugas, confederal secretary of FO. Even the CFDT, the most reformist of the big unions, is opposed: “There are many issues that the CFDT is willing to compromise on, such as support for RSA beneficiaries or long-term job seekers, but serenity is not will be in order.” if the fall is interrupted by a brutal measure,” warned Laurent Berger, general secretary of the union.
Based on the work of the Pension Orientation Council (COR) in recent months, the unions have repeatedly affirmed that there is no urgency in reforming pensions, let alone reforming them for budgetary reasons, the system having to return to its own balance in the next years.
Apart from LR, the main opposition parties are also opposed to the Head of State’s project: “If Emmanuel Macron, from what I have heard, uses the Social Security budget to attack pensions, that is, actually skipping a real debate on this issue, will face total opposition on our part, ”Marine Le Pen, head of the RN group in the National Assembly, warned France 2 on Tuesday.
He also says that “there is absolutely no urgency to tackle pensions at the precise moment when the French are facing great purchasing power difficulties.” On the left, rebellious France also sees pension reform as unnecessary. The president of the LFI group in the Assembly estimated that “Macronie (is) alone in the world in his whim of breaking our pensions.”
• What does the COR say?
So who is telling the truth between the government and the unions? To see it more clearly, you have to look at the latest work of the Pension Guidance Council that issued its annual report on Monday. A document of more than 300 pages in which everyone will find their account…
As the government says, it is fair to say that the pension system has financing needs. In fact, the balance of pension plans should deteriorate “significantly” from 2023 and remain in the red at least until the mid-2030s, at most, according to COR experts.
Opponents of the pension reform prefer to highlight the surpluses generated in 2021 (900 million euros) and 2022 (3.2 billion expected). They also point out that if the system falls into the red again next year, the deficits will not be insurmountable, affirming the COR that there is no “uncontrolled spending dynamics.” Translation: there is no urgency to reform, to crush the unions.
The system will even end up returning to equilibrium in the more or less long term (in the worst case in 2070) depending on the economic situation. An expected improvement due to the disappearance of the baby-boom generation and the increase in the average age of leaving due to the Touraine reform initiated during the five-year term of François Hollande. This reform should gradually increase the contribution period to 43 years by 2035 for insured persons born after 1973.
An extension of the contribution period that is already producing its effects. Still according to the COR, the effective retirement age is now 62 years and 10 months (for a legal age of 62), compared to 61 in 2008. And it should mechanically arrive “around 64, around 2040, under the effect of past reforms. (age and duration of insurance) and the increase in the age of incorporation into working life”.
• Towards an acceleration of the Touraine reform?
Given the risk of social discontent, the Government no longer rules out modifying its project by renouncing a measure to raise the legal age that would unanimously go against it. Instead, one possibility would be to speed up the pace of Touraine’s reform. Deciding, for example, that the contribution period reaches 43 years not in 2035 but in 2030, or even in 2025.
This is precisely what the unions fear, warning the government against a “hidden” age measure in the Social Security financing bill, precisely citing the introduction of “an acceleration of the Touraine reform”.
Source: BFM TV
