Macron government announces pension reforms amid strike threat by trade unions

Amid threats of a strike by trade unions, the French government on Tuesday proposed raising the legal retirement age in the country to 64, from the current 62 by 2030.

French Prime Minister Elisabeth Borne announced the proposal and said extending the pension age will prevent the system from collapsing under the weight of deficits.

"Leaving these deficits to grow would be irresponsible...It would lead inevitably to a massive increase in taxes, a reduction in pensions and would pose a threat to our pensions system," said Bonne.

"I'm very aware that making changes to our retirement system is causing anxiety and fears among French people."

Notably, the workers in France tend to retire much earlier than their European Union (EU) counterparts. The direct repercussion is that the French exchequer has to foot a bigger pension bill than most countries in the bloc.

In Germany, Denmark and Italy, the legal retirement age is 67 while it remains 66 in Spain and the United Kingdom. On average, workers in France retire at 62.3 years of age, according to EU data from 2019.

They also receive 54.4 per cent of their last pay slip as pension on average. Comparatively, the average EU pension amount stands at 46.2 per cent.

Thus, by launching the reforms, President Emmanuel Macron is attempting to rid the country's debt-ridden pension system by pushing the people to work longer.

Since coming to power in 2017, fixing France's complicated pension has been one of the top agendas of the Macron administration. However, the retaliation by the workers and trade unions forced him to take a step back whenever his government attempted to change the status quo.

After years of delay, Macron appears steadfast in making the changes in the new year. Earlier this month in a television public address, Macron emphasised that 2023 will be the year when the much-delayed overhaul of the pension system takes place.

“This year will indeed be that of a pension reform that aims to guarantee the equilibrium of our system in the years and decades to come,” said Macron.

The road, however, may not be easy. After Tuesday's announcement, eight main trade unions have called for a day of strikes on January 19 to protest against the pension reform, according to local reports.

A joint statement released by the trade unions said the one-day strike is expected to kick off a powerful movement for pensions in the long term".

(With inputs from agencies)

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