French PM defies unions with pension overhaul, they pledge more strikes

French Prime Minister Edouard Philippe unveils the details of a pension reform plan, as hundreds of thousands of people demonstrated the day before on the sixth day of a general strike, in Paris, on Dec 11, 2019. PHOTO: EPA-EFE

PARIS (REUTERS) - France's prime minister said on Wednesday (Dec 11) its people should work two years longer to get a full pension, drawing a hostile response from trade unions who said they would step up strike action to force an about-turn.

In a speech that followed days of protests and industrial action, Edouard Philippe outlined an overhaul of France's byzantine pension system that he said would be fairer and plug a gaping deficit in the pension budget.

The legal retirement age would remain at 62, Philippe said, but workers would be encouraged to work until 64 through a system of bonuses and discounts. That would allow a balanced pension budget by 2027, he said.

The reform-minded CFDT union, which has hitherto stayed out of the strikes, said a "red line" had been crossed and that it was calling on members to join mass protests on Dec 17.

The moderate CFDT's entry into the industrial action marks a perilous escalation for Emmanuel Macron, just as more hardline unions show no sign of backing down in a battle of political will that could make or break his presidency.

"The time has come to build a universal pension system," Philippe said in a much-anticipated speech. "I am determined to see this reform through because I believe it to be fair."

Defying union anger, Philippe said France would replace a convoluted system of more than 42 separate state-funded plans with a universal, points-based system that will apply to those entering the job market for the first time in 2022.

He showed some flexibility to unions over the timing, saying anyone within 17 years of retirement would be exempt - a longer period than the five years initially envisaged.

There would be a minimum pension of 1,000 euros (S$1,500) per month for those who worked a full career.

Reform of France's pension system, which offers some of the most generous benefits in the industrialised world, has proven a treacherous task for past and present governments.

Macron and his government will hope to create tangible benefits under a universal, points-based system to divide those under the new regime from those who refuse to let go of old privileges, some of which date back centuries, analysts said.

But if the unions are able to draw more people out of the workplace, the strike which has crippled the transport network, closed schools and forced the cancellation of some flights could run for days, or longer.


The hard-left CGT union accused the prime minister of turning a deaf ear to the strikers.

"We're not at all happy," CGT leader Philippe Martinez told LCI television. "It is a joke."

A Martinez deputy told Reuters the conditions were in place for the strike to harden.

CFDT union boss Laurent Berger said Macron had broken a promise by setting 64 as the average age needed for a balanced pension budget, making it a de facto new retirement age.

The strongest opposition to the planned reform has come from workers with 'special benefit' plans, including rail employees, dockers and Paris Opera singers who are entitled to retire on a full pension years before the average retirement age of 62.

Philippe said a universal, points-based system would be fairer, giving every pensioner the same rights for each euro contributed, and enable workers to move more freely from one job to another in the modern-day labour market.

"We know our children won't have the same linear careers we had and we need a pension system that allows that."

Philippe said that under the new system, every hour worked will earn pension rights, which will benefit gig economy workers such as bicycle couriers and office cleaners, who often do not earn enough to lock in pension rights under the current system.

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