By Aicha Sakhi
The French pension system has been a contentious issue in the country for several years, with various proposals being put forward to reform the complex and convoluted system. The objective of these reforms is to simplify the pension system and ensure its long-term financial stability.
However, the proposed 2023 French pension reform bill, put forward by President Macron’s government, has triggered a new wave of strikes and demonstrations throughout the country. The protests have caused widespread disruptions, making everyday life difficult and, in some cases, even dangerous for citizens living in several French cities. The intensity and frequency of these protests have raised concerns among many observers and policymakers about the reasons behind the French population’s aggressive actions. What is pushing the French citizens to act so aggressively?
The problem of pensions reforms
France’s pension system is built on a “pay-as-you-go structure”– a system in which individuals are expected to finance their own retirement savings accounts by setting aside a fraction of their earned income – and has one of the lowest retirement ages among industrialized countries. Nonetheless, rising life expectancies and decreasing ratio of workers have led President Macron to reconsider the current system and to suggest a new reform bill in October 2022.
The protest began in late 2019, prior to the COVID-19 pandemic, when the government announced its intention to reform the pension system. The initial protests and transport strikes caused significant disruption across the country, with some public transport services coming to a standstill.
The new reform aims at increasing the retirement age – which currently is 62 – to 65 by 2031, which triggered the no-confidence vote that the government has narrowly survived. The idea behind this is to make the pension system financially sustainable without relying on more taxpayer money, so that the resilience of the welfare structure is ensured, in face of an ageing population and increasing life expectancy. However, unions and citizens argue that this will disproportionately affect those in physically demanding jobs who may not be able to work until the age of 65. In addition to raising the retirement age, the reform is directed to streamline the 42 separate pension schemes into a single one: this would mean that all workers, no matter their profession, would be subject to the same rules and regulations regarding their pensions. The government contends that this would make the system more efficient and fairer, but unions argue that this would only lead to a reduction in pensions for some workers who are currently covered by more favorable conditions.
In March 2023, the Labour Minister warned that without immediate action, the pensions deficit would exceed $13bn annually by 2027. The government claimed that the reforms would balance the deficit by 2030, creating a surplus to fund early retirement for those in physically demanding jobs. The reforms announced by Macron are set to be implemented by autumn 2023; however, in early January, Prime Minister Elisabeth Borne stated that the government is also willing to find a common space and be more flexible; many workers and unions remain sceptical nonetheless.
Citizens’ response to the new plan
The proposed changes have boosted widespread anger and frustration among the French population, in particular among workers coming from sectors with special pension regimes – like transport and energy – who fear the possibility of losing their generous allowances in the long-run.
There have been reports of 1,500 protests in cities, which include Marseille, Lyon, Lille and Paris, and of violence on both sides: protesters throwing objects and setting fires, barricading university building, blocking roads and stations, forced the police to take severe measures, such as arresting a lot of people, using tear gas and water cannons in order to calm and disperse the agitated crowds. The situation seems to be affecting the economy and tourism of most cities as well, with businesses, restaurants and bars being forced to close their shutters in order to protect themselves.
The words of a trade unionist leaves no room for doubts on the anger of French citizens: “Macron thinks of himself as a kind of king, Jupiter up high looking down on us. We’ve got to hold out until he listens”. Such an explosive response is due to the common feeling among the protesters that the government is out of touch with the concerns of ordinary people and is prioritising financial stability over citizens’ well-being. Considering the country’s strong tradition of workers’ rights and unionisation, it also seemed absurd to many how little the government consulted with them before even proposing such reforms.
In what ways will Europe be affected by this?
Despite the protests and ongoing opposition, President Macron’s government is staying firm and committed to its plan; at the same time protests against the pension reform have been a reality for more than two years now, and they show no signs of slowing down.
The ongoing pension strikes in France have the potential to have a ripple effect throughout Europe. The current strikes and protests in France are not just about the proposed pension reform but are also a sign of the widespread dissatisfaction with the government’s handling of various issues and it gains a broader political significance: they have been seen as a reflection of a bigger discontent with Macron’s work and his pro-business and pro-EU policies.
How the French government handles the situation and the outcome of the proposed pension reform bill could set a precedent for other countries and influence their future policies on social welfare systems.