December 11, 2019

Pension reform: French PM refuses to back down on plan

Pension reform: French PM refuses to back down on plan

France’s prime minister on Wednesday refused to back down on his government’s controversial pension reform plans in the face of a crippling week-old transport freeze.

Edouard Philippe said he stood “firm” on the principle of his proposed pension changes but that he remained open to discussions on the measures.

Earlier he sought to strike a conciliatory note as he unveiled details of the plan to overhaul the country’s pension system, but failed to appease striking unions which vowed to expand the transport stoppages.

“I am firm on the principle… of a system that will concern everyone… (that will be) truly universal,” he told the TF1 television channel.

Public transport networks in Paris and other cities have been paralysed by the walkout, which began last Thursday and left shops, hotels and restaurants fearing for their bottom line.

Announcing the new plan, Philippe said the government would pursue its objective of creating a new points-based pension system that fuses the country’s 42 existing plans into one, but said the reform was “not a battle”.

He declared the new-look scheme would be fairer and guarantee better basic coverage for the most vulnerable workers, insisting “there will be no winners and no losers”.

In a televised address, Philippe sought to assuage unions’ fears by saying the changes would be implemented gradually, “without brutality”, and would not affect workers born before 1975.

But he angered many with his announcement that although the legal retirement age would remain 62, the government would introduce a “bonus/penalty” system aimed at trying to get people to remain in work until 64.

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Also unwelcome was Philippe’s insistence that special pension provisions for certain sectors — including railway workers, sailors and Paris Opera workers who retire earlier than most — would be scrapped, albeit in a staggered manner.

Unions at state rail operator SNCF called for the transport strike to be “reinforced” in response, while the biggest union at Paris’s public transport operator, UNSA, said efforts to get people to work longer crossed “a red line”.

The three biggest trade union federations, the FO, CFDT and CGT, all criticised the proposals which Philippe believed would “justify” the end of the labour action.

The CFDT called for another protest to be held next Tuesday and said in a statement the proposals were “unjust” and that “a red line had been crossed”.

– ‘Mockery’ –
The head of the CGT union, Philippe Martinez, said the government had made a “mockery” of workers, adding: “Everyone will work longer, this is unacceptable.”

Teachers, who have walked off the job twice in the past week, also declared themselves displeased with the outcome.

Philippe had announced a guaranteed minimum pension of 1,000 euros ($1,100) for minimum-wage workers, higher than some groups, including farmers, currently receive, but well under the average pension of just over 1,600 euros in 2017.

The premier said the new system offered better protection for freelancers, people with gaps in their careers, and women who took time off work to have children.

“The time has come to construct a universal retirement system,” insisted Philippe, adding the government had “no hidden agenda”.

“To guarantee our pension, to finance a higher level of solidarity, to benefit from a higher life expectancy without increasing taxes, the only solution is to work a bit longer, and progressively a bit longer, as is the case everywhere in Europe and everywhere in the world,” said Philippe.

Hundreds of thousands of people have taken to the streets in two mass protests over the reforms since the strikes began on December 5.

It has been the biggest show of union force since President Emmanuel Macron came to power in 2017 vowing to cut public spending and make the economy more competitive.

– Unifying 42 pension systems –
The proposed reform would replace the current pension calculations — based on a private sector worker’s 25 best-earning years, or six months for public servants — with a universal scheme of pension points awarded for hours worked.

Philippe said unions themselves would fix the euro value of a point in consultation with parliament, and a “golden rule” would be written into the new pension law to guarantee that the value of a point “cannot go down”.

Public transport in the capital remained at a near standstill as the strike ground on Wednesday, causing much frustration for commuters and tourists alike.

The head of national rail traffic operator SNCF, Alain Krakovitch, warned the chaos that has also hobbled high-speed and international trains would likely continue “until the end of the week”.

Some labour leaders had vowed to fight through until Christmas.

Those opposing the reform accuse former investment banker Macron of trying to roll back France’s costly but highly cherished welfare state.

Their labour action has revived memories of three-week-long strikes over pension reform that crippled France in 1995, forcing the centre-right government of the day to reverse course.