French workers can retire much younger than most. That’s going to change | CNN affairs

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The French government plans to raise the official retirement age by two years as part of a long-delayed reform of the French pension system. prompted unions to call nationwide strikes next week.

New legislation requires French citizens to work until age 64, rather than their current age of 62, to qualify for a full pension. From September this year, the regular retirement age will increase by three months per year until 2030.

The higher retirement age should Intercept a pension funding shortfall, Prime Minister Élisabeth Borne told reporters on Tuesday as she outlined the reforms.

“I am well aware that changing our pension system raises questions and fears among the French people,” she said, but added that allowing the deficit to grow would be “inexcusable”.

The proposed reforms will generate about €17.7 billion ($19 billion) annually by 2030, Finance Minister Bruno Le Maire said at the press conference.

Other changes announced by Borne include increasing the monthly minimum pension and making maternity leave count towards a woman’s years of work. Those who started working under age 16 have the right to retire at age 58, she said.

From 2027, someone must have worked for 43 years to receive a full state pension.

Overhauling the pension system has been an important part of French President Emmanuel Macron’s election campaigns.

“The goal is to consolidate our pay-as-you-go pension plans, which would otherwise be jeopardized if we continued to fund on credit,” he said in a New Year’s speech.

An earlier attempt by Macron to revive the pension system was met with nationwide strikes in 2019 before being halted amid the Covid-19 pandemic.

Unions had already vowed to oppose the new law, and they quickly responded to Tuesday’s announcement by calling for “a first day of strikes and protest” next week.

“January 19 is the start of the mobilization to prevent the reform from coming into force and to push back the government,” Laurent Berger, secretary general of France’s largest trade union CFDT, told journalists on Tuesday. “Nothing justifies such ruthless reform,” he added.

Workers in France are under pressure from rising food and energy bills, and thousands took part in mass demonstrations against the cost of living last year in the streets of Paris. strikes by workers demanding higher wages caused fuel pumps across the country to run out a few months ago.

According to the Organization for Economic Co-operation and Development, France spends more than most other countries on state pensions, accounting for nearly 14% of GDP in 2018.

In 2019, it had the highest welfare expenditure of any country in the European Union, at almost 34% of GDP, according to Eurostat. That compared to 28% across the European Union.

The government states that changes are needed to make the system financially sustainable.

“Government agencies predict huge deficits in the coming years as boomers continue to retire and they have to make changes very quickly or they will lose money to invest in other things,” said Renaud Foucart, a senior lecturer in economics at Lancaster University in England. . .

By raising the retirement age to 64, France remains below the norm in Europe and in many other developed economies, where the age at which full pension benefits apply is 65 and is moving closer to 67.

In the United States and the United Kingdom, the retirement age is between 66 and 67, depending on the year in which you were born. Current legislation envisages a gradual increase to 68 in Britain between 2044 and 2046, although that is under review and could change.

Nevertheless, according to Foucart, the pension reform in France is ‘very unpopular’. “It’s seen as a taboo,” he added.

The passage of the reforms is all but assured, despite the fact that Macron’s party does not have an absolute majority in the French parliament. In the absence of support from opposition lawmakers, the government could turn to Article 49.3 of the French constitution, a mechanism it has used several times to push through budget laws without putting them to a parliamentary vote.

— Marguerite Lacroix contributed to this report.



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