French PM proposes raising retirement age to 64 by 2030, unions call for strikes

Those who started working before the age of 20 will be able to get early retirement, French Prime Minister Elisabeth Borne said

Published - January 11, 2023 06:53 am IST - PARIS:

French Prime Minister Elisabeth Borne unveiled a pension overhaul aimed at raising the retirement age from 62 to 64 by 2030.

French Prime Minister Elisabeth Borne unveiled a pension overhaul aimed at raising the retirement age from 62 to 64 by 2030. | Photo Credit: Reuters

French Prime Minister Elisabeth Borne on Tuesday unveiled a contentious pension overhaul aimed at raising the retirement age from 62 to 64 by 2030, which prompted vigorous calls for strikes and protests from leftist opponents and labor unions.

Speaking in a news conference in Paris, Ms. Borne said the minimum retirement age to be entitled to a full pension will be gradually increased by three months every year, starting this year, in line with a longstanding pledge by President Emmanuel Macron.

In addition, people will need to have worked for at least 43 years to get a full pension, starting from 2027, she said.

“Working more will allow future retirees to get higher pensions,” Ms. Borne said.

“By 2030, our system will be financially balanced,” she added.

Those who started working before the age of 20 will be able to get early retirement, Ms. Borne added. Specific categories of workers such as police officers and firefighters will also be able to retire earlier.

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.

Center-left and hard-left worker unions unanimously expressed their disapproval of the proposed changes after talks with Ms. Borne last week.

Some are in favor of an increase in payroll contributions paid by employers instead.

The country’s eight main worker unions are gathering on Tuesday evening to set the date of a first protest day against the pension changes.

A heated debate in parliament also is to be expected, starting next month.

Mr. Macron’s centrist alliance lost its parliamentary majority last year — and most opposition parties are opposed to the changes.

Ms. Borne vowed to seek “compromise” with some other political groups. Mr. Macron’s centrist 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 reelected 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.

France’s main MEDEF employers’ union issued a statement welcoming “an indispensable reform to save our pension system.”

The minimum retirement age applies to people who have worked enough years to qualify. Those who do not fulfill 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 ($1,500) per month once taxes are deducted. But that average masks differences across pension schemes depending on professions.

Ms. Borne said the reform will allow the minimum state pension for low-income workers who have a full career to increase by 100 euros ($107) on average, reaching about 1,200 euros ($1,288) per month.

Over the past three decades, French governments have made numerous changes to the system but each reform has been met with massive demonstrations.

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