France split down the middle as pension reform protestors return to the streets
The conflict over pension reform between President Emmanuel Macron’s centrist government and France’s trade union movement, the latter backed by anarchists, populists and the far left, has reached the stage where the middle ground is all but deserted.
Half the population, including increasing numbers of frustrated commuters, are fed up with the headline transport strike that over the last five weeks has repeatedly brought the country to a near standstill. The other half is urging the strikers on in the hope that Macron will abandon his reforms, leaving them with the promise of fat pensions secured by borrowing and the prospect of early retirement.
Today, demonstrators were back on the streets of Paris and dozens of other towns and cities, including Nantes and Toulouse. As always, there was a threat of violence. Things can quickly get out of hand. But worse is the long-term damage to the economy, with days lost and costs rising, as well as to the reputation of France as a place in which to do business.
Talks between the unions and the government, led by prime minister Edouard Philippe, have stalled in recent days. They will resume tomorrow. But, in spite of the evident weariness on both sides, no one expects a resolution anytime soon.
Philippe – whose efforts to restore order are turning his beard white – has done his utmost to persuade his fellow citizens that things cannot continue as they are indefinitely. State pensions are supposed to be funded mainly out of social charges (which in some cases, when added to cost of health cover, amount to 40 per cent of workers’ gross incomes). Increasingly, however, the shortfall between receipts and outgoings is made up for by government borrowing, with the deficit on pensions, by one estimate, likely to reach as much as €19 billion (£16.2bn) a year by 2025.
Under the proposed reforms, a points system would be introduced that yielded pensions on the basis of the number of years worked, with the standard retirement age rising from 62 to 64. Most public sector employees – including railway workers – can at present expect to receive full pensions after 30 years, with special arrangements for those in strenuous occupations or who carry on until they reach 62. The result in many cases is that someone who started work at 20 can hope to retire at 50, though 52-55 is more usual.
To put all this in context, a typical, lower-end state pension, payable from the age of 62, comes out at around €16,500 (£14,300) a year, twice the UK state pension, which starts these days at between 65 and 67.
Who, in all honesty, would want to give that up, especially if someone else is footing the bill?
Philippe, as his masters’ voice, hopes to rationalise the labyrinthine system he inherited by paring back the number of “special” cases (including police officers, firefighters and soldiers, but also merchant sailors, train drivers and, for some reason, opera staff) and subsuming literally hundreds of schemes into a single streamlined package.
As viewed by those affected, every suggested change is a sticking point. But the stickiest of all is the idea of retirement at 64, not 62. To the French, this represents a fundamental attack on their hard-won droits de l’homme, as if the Revolution 230 years ago had been a negotiation between the Jacobins and Louis XVI aimed at securing not only liberty, fraternity and equality, but early retirement, with enough sous to buy bread and wine for the workforce at Versailles.
There is talk of the government side giving way a little, compromising perhaps on 63 rather than 64, or maybe offering more cash per point earned or a few more special exemptions. Who knows? Macron has tried to remain above the fray, outlining the philosophy behind his reforms without getting bogged down in the details. But as the conflict drags on, his own position is potentially the most compromised of all. If he gives in, he’s weak, even finished; if he presses too hard, demonstrations and riots could extend deep into the Spring, with consequences that can only be guessed at.
At one point, the President thought to defuse the situation by announcing that he had relinquished his own state pension of €72,000 a year and – gasp! – would also refuse to take his allocated seat on the Constitutional Council – a sinecure worth €13,500 a month. Few were impressed by the gesture. They know that their 42 year-old head of state made several million dollars as an investment banker in his thirties and that he can expect to make millions more when he leaves office.
So the question now is, who will blink first? The rail workers in particular are running out of money to pay their bills, while the patience of millions of commuters, not to mention Parisian retailers, is being sorely tested. Macron could yet come out ahead – on points – is he sticks to his guns. But if he fails, he will join a sorry line of French leaders, from Chirac by way of Sarkozy and Hollande, who have been defeated by the stubborn refusal of their countrymen to face up to the realities of the 21st century.