We use cookies to help improve and maintain our site. More information.
close

December 11, 2019

Philippe to present pension reform bid

Édouard Philippe will announce the pension reform in all its details at noon today, including some last-minute touches. Judging his intervention in parliament yesterday, the government is keen to demonstrate that it is keeping its word. No, the reform will not be magical and won't keep people away from street protests. After all, the two most radical trade unions want the reform to be given up completely. And yes, there has to be a provision for a balanced pension fund, despite the insistence of the more moderate trade unions. Philippe also put back on the table raising the retirement age to 64. This was one of the lines Emmanuel Macron had thrown out of the window in the autumn when he backed the lengthening of the contribution period instead. Philippe also proposed as a deal sweetener a €1000 minimum pension that could start already in 2021. And the revaluation of teachers' pensions will start with the new generation entering the job force next year.

The idea is to create tangible benefits to divide those under the new regime from those who cling on to old privileges. But there is reassurance in the mix as well. The new point-based unified system might only start to apply for the 1975 generation. For transport-sector workers the government seems ready to allow for even longer transition periods, with the first to enter the new system being the generation of 1985. However, the trade unionists in the transport sector still want a total exemption of all current workers so that only new entrants start in the new system. Whether the reform will sail or not depends as much on the content as on the politics.

Philippe Aghion and three other colleagues argue against a delay, and that the reform results in a fair pension system where the same contribution leads to the same pension and allows careers to flourish across different sectors. In their op-ed in Le Monde they speak against overburdening the reform with too many objectives. The focus should be on the systemic part of the new pension system rather than on trying to condition it on a balanced budget. A later retirement age could be part of this reform, but only if it goes hand-in-hand with increased life expectancy. Pensions as a fraction of GDP or replacement rates are parameters that could help determine the retirement age. 

It is important to create confidence in the new point system. The French public is still wary of the idea that technocrats could mess around with their pension points in the future. This fear must be addressed by a system with clear and stable indices that remain so even in recession times, spelling out clearly the circumstances under which they can be amended. The convergence between private and public-sector pension systems naturally poses challenges, and risks putting privileged civil servants at a disadvantage. It would be against the spirit of the reform to favour the privileged contributors. But there are solutions to allow this transition, either by gradually adjusting the pension contributions or the salaries. Delaying is not a solution, if the ultimate system is fair.

Show Comments Write a Comment

December 11, 2019

The N-VA is back in the game for a Belgian government

There has been a new development in Belgian politics. Not that there is a new government nearly 200 days after the elections. After all, this is nothing unusual in this country. The record for the Belgians is 541 days without a government a decade ago. The elections in May, though, made negotiations more complex. The traditional parties in the centre were weakened by big breakthroughs for radical anti-establishment parties: the far-right Vlaams Belang in Dutch-speaking Flanders and the far-left PTB and the Greens in French-speaking areas.

Yesterday the King appointed two new negotiators, the new conservative leader Joachim Coens from Flanders and the liberal Georges-Louis Bouchez from Wallonia, with the task to explore whether it is possible to form a federal government. In principle these negotiations boil down to the question whether the Flemish nationalist N-VA should be part of the government. The last round of negotiations was all about finding a coalition that could work without including the N-VA, an option insisted upon by the leading Socialists in Wallonia and rejected by the conservative CD&VA in Flanders. 

With the two new negotiators from liberal and conservative parties the options now include the N-VA. It leader Bart de Wever already tweeted hoping it means a Socialist-Green government is now off the table. But is a government without the Socialists, the leading party from Wallonia, possible? The newly-elected conservative leader Coens is definitely mixing up the cards anew. The rainbow coalition between liberals, socialists and greens seems to be off the table.

Negotiations still can fail. What then? The parties could agree to work on constitutional reform, something the N-VA and the even more far-right Vlaans Belaang are keen on. Some observers are wondering whether some bigger questions need to be asked amid the trend of rising fragmentation and disparity between the regions. The last alternative is new elections. This is the most unlikely scenario, as the mainstream parties have the most to lose to anti-establishment ones, which promises an even bigger political crisis. As in some of the other EU member states, sometimes the only reason for staying together is that the alternative of new elections would turn into losses for all parties involved in the decision. 

Show Comments Write a Comment

This is the public section of the Eurointelligence Professional Briefing, which focuses on the geopolitical aspects of our news coverage. It appears daily at 2pm CET. The full briefing, which appears at 9am CET, is only available to subscribers. Please click here for a free trial, and here for the Eurointelligence home page.

 

Recent News

  • March 10, 2020
  • Virus math
  • May 31, 2019
  • Salvini’s frightening strength
  • The significance of Corbyn’s latest flipflop on the referendum
  • August 20, 2018
  • ... and a subtle shift in EU policies towards both Russia and Turkey
  • Nothing to celebrate about the end of the bailout programme
  • Support for Brexit holding up
  • November 08, 2017
  • Spain's attorney general personally sought pre-emptive prison for Catalan rebels
  • Spain's finance ministry to control Madrid city spending
  • National identity with a new twist
  • January 30, 2017
  • On the illusion of choice
  • April 25, 2016
  • The death of the Grand Coalition
  • Insurrection against TTIP
  • Juppé to benefit from Macron hype
  • On optimal currency areas
  • Why the Artic region could be the next geopolitical troublespot
  • From a currency to a people
  • June 24, 2020
  • How not to fob off Karlsruhe
  • October 14, 2019
  • What is Turkey's medium-term game?
  • Germany sabotages EIB climate change policies
  • January 31, 2019
  • EU will play hardball until February 14, and stick to backstop beyond
  • French left and right moves ahead of EP elections
  • Tighten the belts as the economy prepares for landing
  • May 23, 2018
  • Mattarella’s limited options
  • September 13, 2017
  • Why the Turkey negotiations will continue
  • January 05, 2017
  • French Socialist primaries - old wine in new bottles
  • Le Pen's hard ecu
  • Will Tusk get a second mandate?
  • Themes of 2017
  • April 25, 2016
  • The death of the Grand Coalition
  • Insurrection against TTIP
  • Juppé to benefit from Macron hype
  • On optimal currency areas
  • Why the Artic region could be the next geopolitical troublespot
  • From a currency to a people
  • June 26, 2020
  • An interesting candidacy in Dutch politics
  • The EU’s real test is China, not the pandemic
  • November 18, 2019
  • Is Macron facing another uprise against elites?
  • Forget the inflation target: Lagarde’s job is much bigger.
  • April 12, 2019
  • Where does Wednesday’s uneasy compromise leave the EU?
  • September 05, 2018
  • May’s gamble
  • The ultimate migrant
  • January 30, 2018
  • Will Puigdemont be Catalan premier today?
  • Some thoughts about the German car industry
  • A short note on Italian coalition maths
  • June 28, 2017
  • Is gay marriage Merkel’s next refugee problem?
  • November 25, 2016
  • Unstoppable Fillon
  • To disengage or not from Turkey
  • Spain's opposition scores minimum wage victory in parliament
  • Can Tony Blair succeed to undo Brexit?
  • April 25, 2016
  • The death of the Grand Coalition
  • Insurrection against TTIP
  • Juppé to benefit from Macron hype
  • On optimal currency areas
  • Why the Artic region could be the next geopolitical troublespot
  • From a currency to a people
  • September 01, 2020
  • What just happened in front of the Reichstag?
  • When revolutions fail
  • March 03, 2020
  • On the unintended consequences of GDPR
  • September 05, 2019
  • Would Keynes be in favour of Brexit?
  • March 11, 2019
  • Ask what Europe can do for Germany - AKK's EU manifesto
  • September 14, 2018
  • Carney warns about dramatic hard Brexit impact on housing market
  • Can Africa thrive on free trade with Europe?
  • March 21, 2018
  • The political pathway to a Brexit revocation is closing
  • September 26, 2017
  • Brexit is a binary choice between EEA or third-country status
  • April 05, 2017
  • What if Macron were to become president?
  • The case for relative optimism about Article 50
  • October 14, 2016
  • Tusk's awkward choice
  • Seven candidates, three debates
  • April 25, 2016
  • The death of the Grand Coalition
  • Insurrection against TTIP
  • Juppé to benefit from Macron hype
  • On optimal currency areas
  • Why the Artic region could be the next geopolitical troublespot
  • From a currency to a people
  • May 22, 2020
  • Russia and Turkey double down in Libya
  • What to make of No 10's Brexit briefings
  • January 15, 2020
  • Philippe's not-so-generous compromise offer
  • What is Erdogan up to in Libya?
  • When it is noise and not a signal
  • September 11, 2019
  • What are the chances of a deal?
  • May 09, 2019
  • The EU's impossible dilemma
  • The horsetrading starts in Sibiu
  • May to bring withdrawal bill to Commons week after next
  • January 04, 2019
  • Will the AfD become the Dexit party?
  • Romania's corruption problem in the spotlight of its EU presidency
  • August 24, 2018
  • Towards a standoff between Italy and the EU
  • A short note on the diminishing role of economists in political life
  • April 23, 2018
  • More bad news for the SPD
  • Will Theresa May accept a customs union? The Times says yes. We think so too.
  • A comeback for Marine Le Pen?
  • December 20, 2017
  • Down with the gown
  • How to overcome the political gridlock in Italy
  • Varoufakis is suing the ECB
  • August 21, 2017
  • Soft, getting softer
  • Tsipras' chances of a boost
  • On the fallacy of a middle-ground option for the eurozone
  • April 12, 2017
  • Macro in a state of denial
  • Where Schulz is vulnerable
  • Schäuble’s three party tricks
  • December 15, 2016
  • Scared of its own electorate
  • Towards a transitional deal
  • The comeback of Gerhard Schröder as the SPD's powerbroker
  • August 19, 2016
  • Brexit realities slowly dawning on the City
  • Opening shot for Hollande's campaign
  • April 25, 2016
  • The death of the Grand Coalition
  • Insurrection against TTIP
  • Juppé to benefit from Macron hype
  • On optimal currency areas
  • Why the Artic region could be the next geopolitical troublespot
  • From a currency to a people
  • September 08, 2020
  • Why you should not trust the media on Brexit
  • August 17, 2020
  • How Putin could divide the EU over Belarus
  • The impossible mission of forming a federal government in Belgium
  • July 20, 2020
  • What will happen on January 1
  • June 29, 2020
  • Édouard Philippe - mayor or prime minister?
  • Sir Humphrey, R.I.P.
  • June 09, 2020
  • The EU and the re-emergence of the state
  • This is not 1968.
  • May 22, 2020
  • Russia and Turkey double down in Libya
  • What to make of No 10's Brexit briefings
  • May 06, 2020
  • ...and what it means for the future of the EU
  • Ciudadanos saves Sanchez' Covid-19 plan
  • April 21, 2020
  • Lockdown as burden and opportunity
  • April 06, 2020
  • The feedback loop of Covid-19 and inequalities - part 10 of our series
  • How confinement affects mental health
  • March 23, 2020
  • Orbán seeks to extend his powers
  • UK as the double counterfactual
  • March 09, 2020
  • Lockdown measures are not working
  • Will the ceasefire hold in Idlib?
  • February 24, 2020
  • Coronavirus comes to Europe
  • Municipal elections - a precursor for Le Pen?
  • Germany and France get involved over Idlib
  • February 14, 2020
  • What defines political success nowadays?
  • Forget the green deal. Call it climate hypocrisy instead.
  • February 05, 2020
  • Russia and Turkey on collision course
  • Politics of rupture - Ireland edition
  • What drives Italian parties to support or reject early elections
  • January 27, 2020
  • How the left lays the ground for Le Pen
  • Project Fear - Irish Edition
  • January 20, 2020
  • The EU in a diplomatic bear hug
  • French pension strikes come to a halt as violence grows
  • Scholz to stick to fiscal surplus in 2021
  • January 13, 2020
  • Libya - the new playground for diplomatic posturing
  • NI has a government at last
  • January 06, 2020
  • A decade that started with a bang
  • What to expect of Spain's next government
  • Divide et impera: Macron's pension reform strategy
  • December 23, 2019
  • What’s behind the NordStream2 sanctions
  • An important ruling by the Dutch constitutional court
  • This time Popolare di Bari brings EU bank resolution into question
  • The reversal of the eurozone external balances
  • No Christmas truce in France
  • Brace for Erdogan's foreign policy ambitions
  • On the decline of the centrist left
  • December 19, 2019
  • Merkel rejects NordStream2 counter-sanctions
  • December 16, 2019
  • What the failure in Madrid says about multilateral governance
  • December 12, 2019
  • Greta is right - the EU’s fight against climate change is most likely a PR exercise
  • December 11, 2019
  • Philippe to present pension reform bid
  • The N-VA is back in the game for a Belgian government