“Working longer is inevitable,” Labour Minister Eric Woerth told journalists Wednesday. “There is no magic solution.”
Woerth met President Nicolas Sarkozy late Tuesday night to finalise the package, which also includes a 1 per cent increase for top earners and capital gains to finance the government’s pensions scheme.
The retirement age, which has been 60 since 1982, when Socialist François Mitterrand was president, is set to go up to 62 by 2018. And French people will have to contribute to the social security scheme for 41 years and three months, rather than 40 years and six months, to receive a full pension.
With many younger workers unable to find full-time paid employment until their late 20s, opinion polls show the French more concerned over this measure than over the rise in the retirement age.
The package aims to wipe out the pensions system deficit by 2018. This year it is expected to reach 16.8 billion euros and, with an ageing population, Prime Minister François Fillon has predicted that it would reach 100 billion euros in 2050 if changes were not made.
Woerth predicts that his reform will reduce the deficit to 7.8 billion euros in 2015 and balance the budget by 2018.
Unions oppose the change but have been divided in their responses.
One union federation, Force Ouvrière, on Tuesday organised a strike and a demonstration in Paris, which it claims mobilised 70,000 people. Six other unions have called a strike for 24 June.
Socialist leader Martine Aubry has slammed the proposal to raise retirement age as “unjust” and “ineffective” on the economic plane.
Several other European countries have reformed their pensions systems because of ageing populations and economic austerity.
At the weekend Fillon announced 45 billion euros of cuts over the next three years.