January 30, 2020
Trade union politics on balancing France's pension fund
French trade unions and employers are still divided over the pension system as they start their negotiations today over how the new system is to be financially balanced. If no common plan is agreed by April, the government will take back the reins.
Édouard Philippe agreed to let trade unions and employers come up with their own cocktail of measures to finance the €12bn deficit the fund faces in 2027, and to ensure a balanced pension fund subsequently. The government granted this last round of negotiations in exchange for scrapping plans to raise the full pension retirement age to 64 for the current generation. But that will hold only if unions and employers find a financial alternative to balance the fund. But trade unions are far apart on this matter. The radical CGT and FO insist on a full withdrawal of the pension reform and do not accept any savings measures to balance the fund. The moderate CGDT was the one asking for this negotiation window to avoid the rise in retirement age. They are in favour of the unified point-based pension system, but want to leave their mark on the draft. They are presenting 40 measures to the National Assembly, which opens its debate on the pension reform draft next week. The employers excluded any rise in pension contributions, arguing that it would be detrimental for their competitiveness and their capacity to create jobs. If trade unions and employers cannot find a solution by April, the government will get back into the ring like it did when negotiations about the unemployment insurance failed to produce any satisfactory result. The stand-off over the pension reform is far from over yet.
Firefighters, meanwhile, succeeded to get enough concessions from the government to stop their protest movement, after violent clashes with the police earlier this week. The interior minister announced that their hazard premium will rise from 19% to 25% as of next year, and that they will have special treatment under the new unified pension system. They could be allowed to retire at 57 with an additional contribution. The unified pension system gets more and more exceptions as the challenges continue.