French PM offers concession to unions over pension reform

Protesters running away from tear gas during a demonstration last Saturday in Paris, as part as a nationwide multi-sector strike against the French government's move to overhaul the pension system.
Protesters running away from tear gas during a demonstration last Saturday in Paris, as part as a nationwide multi-sector strike against the French government's move to overhaul the pension system.PHOTO: AGENCE FRANCE-PRESSE

PARIS • French Prime Minister Edouard Philippe has offered a major concession to unions contesting his government's overhaul of the pension system, in a move aimed at ending strikes which are now in their fifth week.

Mr Philippe, in a letter to unions and employers last Saturday, said he was prepared to withdraw plans to raise the retirement age for full pension benefits by two years to 64 if certain conditions were met.

"The compromise that I'm offering... seems to me the best way to peacefully reform our retirement system," Mr Philippe said in a copy of the letter obtained by Reuters.

His concession came after talks between the government and trade unions to break the deadlock failed last Friday.

France's biggest union, CFDT, which is inclined to accept limited reform, welcomed the move, saying in a statement that it showed the "government's will to find a compromise".

But the hardline CGT union, which wants the reform dropped altogether, rejected the offer and called on workers to join in a series of protests this week.

The government's concession comes as tens of thousands of protesters marched through eastern Paris against the reform, which aims to replace France's myriad sector-specific pension schemes with a single points-based scheme.

The protest turned violent on its fringes with police firing tear gas and charging at groups which were smashing windows and setting rubbish bins and billboards on fire.

The government's stand-off with the unions is the biggest challenge yet of President Emmanuel Macron's will to reform the euro zone's second-biggest economy.

 
 
 

Mr Philippe's government had hoped to create incentives to make people work longer, notably by raising the age at which a person could draw a full pension to 64 while maintaining the legal retirement age at 62.

The government has argued that the pension reform, which would be the biggest since World War II, would make the system fairer while also putting it on a more sound financial footing.

France, which has one of the lowest retirement ages among industrialised nations, spends the equivalent of 14 per cent of economic output on pensions.

The plan would replace the current system of 42 different pension regimes, most tailored to match individual professions, with a single, points-based system that will be the same for everybody.

Workers would accumulate points, then cash them in at the end. Bus drivers in Toulouse would get the same retirement benefits as those in Paris - not now the case, as the Paris system has some of the country's most generous benefits.

Now, workers in the private and public sector get pension benefits based on the salaries of their best working years. That system would end.

REUTERS, NYTIMES

A version of this article appeared in the print edition of The Straits Times on January 13, 2020, with the headline 'French PM offers concession to unions over pension reform'. Print Edition | Subscribe