The opposition Socialist Party and trade unions across France on Thursday sharply criticised President Nicolas Sarkozy's plans to raise the retirement age from 60 to 62. His government on Wednesday unveiled a controversial plan to raise the retirement age over the next eight years and to drastically reduce the special pension benefits that make France a pensioner's haven. Finance Minister Eric Woerth announcing the measures said they would allow the government to eliminate the retirement system's nearly $40-billion deficit by 2018.
In an angry retort, trades unions which described the government's plan as “favouring the rich” and “totally unjust” have called for mass strikes and industrial action following the summer break when France returns to work in September.
Mr. Sarkozy has been extremely clever, revealing his plan in dribs and drabs, effectively taking the wind out of the opposition's sails. The announcement of the plan a mere 15 days before the country stops work for the long summer break means that the unions cannot organise industrial action and strike while the iron is hot.
Mr. Sarkozy has gambled that by the time the workforce gets back into harness in September, most French people would have digested his pension reforms. An opinion poll, however, showed that over 60 per cent of the French were opposed to increasing the retirement age.
For years, there has been talk of increasing the retirement age. This is because of changes in the demography. French people live much longer than before. They also produce far less children than before, with the result that there are more retirees than there are workers to replenish the pension fund. With people living healthy lives until well into their 80s, it seems logical that they should continue working at least until 65. But each time the government has tried to introduce changes these have been torpedoed by crippling strikes, staged mainly by public sector workers who have the most to lose.
Now with the economic crisis limiting state spending, polls show that most French are resigned to a degree of changes to reduce the nation's debt. The announcement puts France in line with other European countries making unpopular budget cuts. Governments across the continent are struggling to control massive deficits made worse by the global economic crisis and to calm fears of resulting financial instability within the European Union.
Retirement age will increase by increments of four months per year, starting with people born in 1951. Workers with physically harmful jobs will be able to retire at the current limit.
Part of the plan to reach a balanced budget by 2018 depends on job growth. However, some economists fear that spending cuts made across Europe, at a relatively rapid pace, could end up slowing the economic growth needed to balance those budgets.
A report “France to raise retirement age” (“International” page, June 18, 2010) incorrectly referred to Eric Woerth as the Finance Minister (first paragraph). The writer clarifies that Mr. Woerth has long been on the financial and tax side and was Minister of Budget until 2010. However, his tendency to nibble at some of the responsibilities of Finance Minister Christine Lagarde has earned him the nickname of “finance minister (bis)” meaning “additional”. He is now the Labour Minister. (Even in this latest series of measures on pensions, he has introduced fresh taxes, which is not really his domain but that of the new Budget Minister Francois Baroin.)