France pension reform poses Macron with his biggest challenge yet

The French president managed to enact changes to the labor market, railways and wealth tax in his first term but faces huge social discontent over plans to raise the retirement age

France pension reform
Protesters carry a sign with the slogan "No to Macron's pension. 60 years for all", in the Place de la République in Paris on January 19.Nathan Laine (Bloomberg)
Marc Bassets

French President Emmanuel Macron has decided to push ahead with the most unpopular initiative he has undertaken since he assumed power in 2017: pension reform. Having shelved the plan in 2020 in the face of widespread protests, the French government admitted the proposed reform for debate on Monday, by which the retirement age in France will be raised to 64 from 62 by 2030 and the requirement for workers to have contributed a minimum of 43 years in social security payments to be eligible for a full state pension will be brought forward by eight years to 2027.

Macron’s proposal has been met with widespread social opposition. According to a poll by Ifop, 68% of French citizens are against the reform. Last Thursday, while Macron was in Barcelona signing a friendship treaty with Spanish Prime Minister Pedro Sánchez, over a million protesters took to the streets in France. The strikes and demonstrations evidenced the schism between Macron and the electorate over the issue, which paradoxically, the French president may be able to drum up enough votes in parliament to adopt.

Despite losing their absolute parliamentary majority in legislative elections last June, Macron’s centrist Renaissance party is confident it can count on the support of the liberal-conservative Republicans (LR). Should it fail to obtain sufficient votes from the LR, the government could opt for the decree route, although that would risk further social discontent. Opposed to the plan are the entire leftist bloc and the hard right of Marine Le Pen, as well as the trades unions including the moderate CFDT, the largest in France in terms of members and generally conciliatory toward Macron.

Transport workers hold a banner that reads, 'Workshop TGV Paris South East on Strike' during a protest called by French trade unions in outside the Gare de Lyon, in Paris on January 19, 2023.
Transport workers hold a banner that reads, 'Workshop TGV Paris South East on Strike' during a protest called by French trade unions in outside the Gare de Lyon, in Paris on January 19, 2023.STEPHANE DE SAKUTIN (AFP)

After Monday’s parliamentary session, Labor Minister Olivier Dussopt stated that the government will seek to maintain two key points of the pensions reform: raising the retirement age to 64 and the requirement for 43 years of contributions. However, Dussopt added he remained open to improvements to the draft proposal during the parliamentary process. Speaking during a joint press conference with German Chancellor Olaf Scholz last Sunday, Macron said that the government must be allowed to work with parliament to “move the country forward.” The president’s message was clear: whatever France’s workforce may feel, this reform is a fundamental initiative in Macron’s second and final term, and although he is open to discussion on modifications, he will not bow to pressure to shelve the project.

Beyond the financial reasoning for the reform, it is a question of credibility: Macron came to power almost six years ago promising to transform France economically, and his presidential legacy will depend on whether he has succeeded in that goal. Having pushed through reforms to the labor market, public railways and wealth tax during his first term, he elected to put off pensions reform in 2020 when it was close to being approved, during the first coronavirus lockdown in France. When campaigning for the presidential elections of 2022, he pledged that he would tackle the mother of all reforms if he was re-elected.

Opponents of the reform accuse Macron of eroding the French welfare state with neoliberal policies. They point out that, according to an official report, in 2021 the pension system had a surplus of €900 million and in 2022 that figure stood at €3.2 billion, although the same report also notes that it will be in deficit for the next 25 years. The study also points out that the reform will penalize people without advanced education who entered the labor market at a younger age and, frequently, in precarious employments that cause physical wear and tear.

Supporters of the initiative say that more work is required to make this pillar of social protection viable in the context of an aging population, and state that Macron’s proposed reform is a preferable option to raising taxes to fund the system or reducing pensions. According to their figures, in 2002 for every retiree, there were two active workers paying social security contributions. In 2022, that figure was 1.7; in 2030 it will be 1.6 and by 2040, 1.5. They claim that under their proposal, the books will be balanced by 2030, while also noting that the retirement age in most European countries is already higher than 64.

Thursday’s protests were among the biggest witnessed in France in recent decades and provided an idea of the scale of public rejection of pensions reform. “In France, the moment you touch what has been the foundation of our societies in the postwar period, such as the welfare state and social progress, there is an outcry,” Adelaide Zulfikarpasic, general director of polling firm BVA France told reporters on Friday. “When it comes to pensions, you are touching something that is intimate to the French: their life balance, their wallets and their plans for the future.”

It now remains to be seen if social pressure will be maintained. A second round of strikes and protests is scheduled for January 31 and will provide a gauge of public sentiment. The question then is whether, if the protests gather pace, Macron will be forced to backtrack.

Zulfikarpasic believes that although public discontent could force Macron to water down his reform, the French president will not relent entirely. “I may be wrong,” she said, “but I get the impression that the most important thing for him is to be able to push through this reform. He does not have to run for re-election and it’s something he wants to inscribe on the end of his mandate. ‘I am a reformer; I made the pensions reform.’”

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