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Economy

Unions pledge to fight French government's pensions reform

media A meeting on pension reform in July with Medef president Pierre Gattaz (L) AFP

France's Socialist government has unveiled a major effort to reform its debt-ridden pension system. But bosses have called the plan “dangerous”, while unions have pledged to fight it.

Prime Minister Jean-Marc Ayrault’s proposals are “unacceptable” because they are “dangerous”, Pierre Gattaz of the employers’ organisation, Medef, declare Ayrault had explained them to bosses’ and workers’ representatives.

“All the government does is tax, tax,” he complained.

And, if the habitually compliant CFDT union declared itself happy with the plan, two other union federations, the CGT and Force Ouvrière, have refused to call of a nationwide protest on 10 September.

“We made proposals for a radical reform with short-term and long-term but the prime minister dismissed the CGT’s proposals with a save of his hand,” CGT member Eric Aubin said.

France has come under increasing pressure from Brussels to find ways of saving its generous state pension scheme, which was predicted to be 20 billion euros in the red by 2020.

But pension reforms are highly contentious in France with previous efforts in 1995 and 2010 sparking strikes and protests, although they failed to prevent Nicolas Sarkozy’s right-wing government raising the minimum retirement age by two years to 62-years-old and the maximum to 67.

Ayrault’s plan, which will be officially tabled 18 September, avoids some of the more controversial proposals floated in recent weeks, such as introducing a new tax on pensioners.

Dossier: Eurozone in crisis

Instead, the government has proposed that employees and businesses pay more every month into the retirement system with employers compensated, in part at least, with an end to their contributions to family allowances and sickness benefits.

The plan also means that by 2035 French workers will have to have paid in to the scheme for 43 years to receive a full pension, compared to the current 41.5.

That will mean that to qualify for retirement on a full pension at 62 a worker would have to have started paid employment at 19, compared to the current average of 23.

The government says the measures will save the state's strained retirement system 7.3 billion euros by 2020, with the books balanced by 2040.

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