French PM Elisabeth Borne to unveil pension changes that upset many workers

France government argues that French people live longer than they used to and therefore need to work longer to make the pension system financially sustainable.

Protesters of the CGT union march in a demonstration against a divisive Bill redesigning the national retirement system, in Lyon, central France. File | Photo Credit: AP

French Prime Minister Elisabeth Borne is to unveil, on January 10, a highly sensitive pension overhaul aimed at pushing up the retirement age that has already prompted vigorous criticism and calls for protests from leftist opponents and worker unions.

The minimum retirement age to be entitled to a full pension is expected to be gradually increased from 62 to 64 or 65, in line with a longstanding pledge by President Emmanuel Macron. Details are to be released by Ms. Borne at a news conference.

The government argues that French people live longer than they used to and therefore need to work longer to make the pension system financially sustainable. All French workers receive a state pension.

Centre-left and hard-left worker unions unanimously expressed their disapproval of the proposed changes after talks with Ms. Borne last week. Some are in favour of an increase in payroll contributions paid by employers instead.

The country's eight main worker unions are gathering on Tuesday to set the date of a first protest day against the pension changes. A heated debate at Parliament also is to be expected.

Mr. Macron's centrist alliance lost its Parliamentary majority last year — and most Opposition parties are opposed to the changes. Mr. Macron's lawmakers hope to be able to ally with members of the conservative The Republicans party to pass the measure. Otherwise, the government may use a special power to force the law through parliament without a vote — at the price of much criticism.

The pension reform is an electoral promise from Mr. Macron, who failed to implement a similar measure during his first term. The proposal at that time sparked nationwide strikes and protests, before the COVID-19 crisis led the government to postpone the changes. Mr. Macron was re-elected for a second term last year.

France's Retirement Guidance Council issued a report last year showing that the pension system is expected to have a deficit over the next decade, with the government having to compensate.

The minimum retirement age applies to people who have worked enough years to qualify. Those who do not fulfil the conditions, like many women who interrupt their career to raise their children and people who did long studies and started their career late, must work until 67 to retire without penalty.

The average pension this year stands at 1,400 euros per month ($1,500 per month) once taxes are deducted. But that average masks differences across pension schemes depending on professions. Over the past three decades, French governments have made numerous changes to the system but each reform has been met with massive demonstrations.