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Pension dispute in France: caught in a culture of confrontation

While Economics Minister Bruno Le Maire is promoting France as “the most attractive industrial nation in Europe”, the social tensions and conflicts in our neighboring country continue. If the movement of the yellow vests had just subsided, images of protests and strikes against the pension reform have shaped the perception of France since December. The 40-day strike by railroad workers and employees of the Paris local transport companies has recently subsided; but the conflict is far from being resolved. The government has by no means won the battle for public opinion either. Recent polls show that 61 percent of the population still want President Macron to withdraw his reform project.

The government gives in - a little

In view of the massive protests and strikes, Prime Minister Edouard Philippe had recently shown willingness to give in - at least to the reform-minded unions. He is currently suspending the controversial increase in the retirement age from 62 to 64 years. The Prime Minister expects this increase in the retirement age to contribute to the balanced financing of pensions from 2027. A deficit in pension financing of between EUR 7.9 and 17.2 billion is then expected.

Originally, President Macron's goal of his pension reform was to standardize the hitherto highly fragmented system and to abolish special regulations for certain professional groups - including railway workers and employees of the Parisian transport company. This message of wanting to create a fairer and more transparent pension system met with a positive response.

State pension subsidies should decrease

But linking them with the goal of ensuring long-term financial stability by changing the performance parameters had reinforced fears of a deterioration in pension benefits. Especially since the urgency of financial consolidation of the pension system is controversial. It does not arise from demographic constraints, but from the decision to cut back the state subsidies of the system. Raising the retirement age appears to compensate for this reduction in state subsidies.

Also, the government has not been able to explain how the future pension system based on a point system will work, how the pensions will be calculated and what value the individually collected pension points will have. In addition, the promise to create more justice in the system has been heavily watered down by new exception rules and, depending on the age group, different transitional regulations. It is essentially these technical, political mistakes and the resulting increased mistrust of a government that was previously considered to be socially insensitive that explain the extent and intensity of the protests.

Decree or negotiation?

Above all, however, it is a long-established “culture of confrontation” that explains the severity of the argument. As Jean-Marie Pernot, researcher at the union-affiliated research institute IRES, observes, the trade unions see every announcement of reforms as a threat to social rights, which must be responded to with protest.

Conversely, even for the French state, which sees itself as the sole representative of the common good, the term “negotiation” does not appear to be part of its vocabulary. Macron in particular, who had started with the promise of political renewal, is accusing the unions of sticking to the well-known authoritarian political style. The social dialogue has degenerated into an empty routine, leaving the unions only to choose between standing still and street protests.

Now social partners should make suggestions

The government initially alienated the largest union, the CFDT, which was prepared to reform and did not call for strikes. This supports the idea of ​​standardizing the pension system, but insists on separating this reform from financing issues. The fact that raising the retirement age is off the table for the time being can therefore be attributed to the CFDT as a particular success in negotiations - nevertheless, it owes this success to the pressure of the protest actions, in which it hardly participated. And it remains to be seen whether the success will not turn into a Phyrrus victory.

This is because the suspension of the increase in the retirement age is linked to the fact that the social partners propose alternative measures for financial consolidation by the end of April at a funding conference convened by the government. This will be a difficult undertaking, especially since the social partners have very different ideas about financing and the government has also ruled out various options - no increase in labor costs, no lowering of the pension level. Some observers also see a trap in this obligation on the part of the social partners.

Marine Le Pen benefits

Because if the social partners cannot propose an amicable solution, the government will come back to its plan to raise the retirement age and then push it through with its majority in the National Assembly. At first glance, this would be another success for “reform president” Macron - but it would only strengthen his perception as a socially insensitive “president of the rich”, for whom ordinary citizens do not count. And this could drive other groups of voters into the arms of Marine Le Pen, who, according to surveys, has already shortened the gap to Macron in a possible runoff election in 2022.

Overall, however, instead of the departure into a “new world” promised by Macron, it would be a sign of persistence in the “old world” with its culture of confrontation. And this - according to the former Senator and MEP of the Socialist Party, Henri Weber - has now become a serious handicap for our neighboring country.