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France’s Pension Changes Won’t Affect Older Workers, Prime Minister Vows France’s Pension Changes Won’t Affect Older Workers, Prime Minister Vows
(about 4 hours later)
PARIS — Hoping to tamp down the transport strikes that are choking France, Prime Minister Edouard Philippe promised in a much-anticipated speech on Wednesday that the government’s planned pension overhaul would not affect older workers and would have a limited effect on those now in mid-career. PARIS — Hoping to tamp down the transport strikes that are choking France, Prime Minister Edouard Philippe promised in a much-anticipated speech on Wednesday that the government’s planned pension overhaul would not affect older workers and would have a limited effect on those now in midcareer.
Eventually, changes would be made to push French people to work until age 64, beyond the current retirement age of 62, Mr. Philippe said, but the full effect of the pension changes would be felt only by people born after 2004. Those born before 1975 would not be affected at all, he promised, and he offered guarantees to a host of professions — including teachers, nurses, soldiers and police officers — that their pension benefits would be protected. But he again angered the unions on a crucial point — pushing the French to work longer — raising doubts about an early end to the strikes, which have also hit schools and government services, and setting up a possible prolonged battle between workers and the government of President Emmanuel Macron.
But on some crucial points that have brought tens of thousands into the streets and halted public transport, Mr. Philippe was firm: The “special systems” governing pensions for millions will be done away with, replacing 42 different pension plans with one points-based system for all workers. Mr. Philippe, the president’s stoic frontman for the pension plan, said that through incentives and penalties, the French would be encouraged to work until 64, past the legal retirement age, 62, one of the lowest in Europe. He also made concessions on the start date of the changes, which would go into effect in 2022, but only progressively, and at an even slower pace for those, like railway workers, who are currently in “special” retirement schemes.
The overhaul has been a central goal of President Emmanuel Macron and Mr. Philippe, who have argued that getting the French to retire later and streamlining the pension system, one of the world’s costliest and most generous, are needed steps to put the system on a sounder financial footing. But the new age target was too much for a critical moderate union, the French Democratic Confederation of Labor, or C.F.D.T., whose support the government needs and which had held back from the strikes.
“We’re proposing a new pact between the generations, one faithful in spirit to that which the National Resistance Council put in place after the war,” he said. “It’s a profound reform of the rules, to correct injustices and to take into account the new realities.” “The red line has been crossed,” said Laurent Berger, secretary general of the C.F.D.T. Union.
Mr. Philippe made concessions on the start date of the changes, which would go into effect in 2022. For people born from 1975 to 2004, only the years they work after 2025 would be affected, he said. The militant leftist General Confederation of Labor, or C.G.T. Union, which has spearheaded the strikes, struck an even harsher tone, an ill omen for government hopes of easing tensions.
It seemed unlikely that this would be enough to quell union anger, and the immediate reaction from organized labor was bad news for the government. The moderate French Democratic Confederation of Labor, the country’s largest union, whose support Mr. Macron needs, said it was disappointed. “We’re obviously not at all satisfied by the government’s announcements,” Philippe Martinez, leader of the C.G.T., said after the prime minister’s speech. “They’re not taking us seriously, and they’re not taking seriously those who are in the fight today.”
The union’s chief, Laurent Berger, said that “a red line has been crossed” with Mr. Philippe’s vow to push the French toward a retirement age of 64. The most hard-line unions like the C.G.T. want the government to withdraw the whole project. Others, like the C.F.D.T., are not opposed to an overhaul in principle, but are suspicious of the government’s plans and want guarantees that nobody will lose out.
The government is determined to streamline the French pensions system, one of the world’s costliest and most generous. France’s pension system, one of the most protective in the world, has been a traditional third rail in national politics, responsible for the downfall or weakening of successive governments. The current administration may not prove an exception.
In the short run, Mr. Philippe needed to address several critical issues to have any hope of calming the unions and ending the transit strike: precisely when the pension overhaul would begin, whether there would be a transition period for the myriad “special systems” tailored to individual professions, and how the government would protect the value of the “points” earned during a working life. Mr. Philippe warned his parliamentary representatives on Tuesday that he would not be waving any “magic wand” to end the strikes. And the disruption for commuters continued on Wednesday, with most subway lines in Paris still shut, and most medium- and long-distance trains canceled. Already, the effects on shopping, tourism and trucking are being felt.
Mr. Macron wants to unify the system and do away with the special pensions systems that date back decades or even centuries in a few cases. He would give all workers points correlated to the number of years they work, and people would cash them in upon retirement. In his speech, the prime minister notably excluded older workers from the pension overhaul. He also offered guarantees to those in a host of professions — including teachers, nurses, soldiers and police officers — that their pension benefits would remain intact.
The hardest-line unions — like the leftist General Confederation of Labor, which has spearheaded the demonstrations and strikes — want the government to withdraw the whole project. Others, like the French Democratic Confederation of Labor, are not opposed to an overhaul in principle, but are suspicious of the government’s plans and want guarantees that nobody will lose out. But it quickly became clear that he had not backed down far enough to quell the social unrest plaguing Mr. Macron’s government less than a year after he brought tenuous calm to the “Yellow Vest” uprising that began over a gasoline tax and expanded into wider discontent over his policies.
Mr. Philippe warned his parliamentary representatives Tuesday that he would not be waving any “magic wand” to end the strikes that are interrupting services across France. And the disruption for commuters continued on Wednesday with most subway lines in Paris still shut, and most medium- and long-distance trains canceled. Some unions quickly called for a redoubling of resistance to the government. The head of a major rail union, Laurent Brun, said a “toughening of the strike” was now needed in response to Mr. Philippe.
And Jean-Luc Mélenchon, head of the leftist France Unbowed party, said: “Those who are now 15 are condemned to this points system. The others are thrown into an incoherent and treacherous labyrinth.”
Mr. Philippe said that the full effect of the pension changes would be felt only by people born after 2004, and those born before 1975 would not be affected at all, he promised. For people born between those years, only the period they work after 2025 would be affected, he said. The prime minister also fixed the minimum pension at about $1,100 a month.
“We’re proposing a new pact between the generations, one faithful in spirit to that which the National Resistance Council put in place after the war,” he said, referring to the 1940s body that coordinated the actions of the French Resistance and outlined postwar social and economic policies that became the foundation of France’s social security model. “It’s a profound reform of the rules, to correct injustices and to take into account the new realities.”
But Mr. Philippe was firm on crucial points that brought tens of thousands into the streets and halted public transport: The “special systems” governing pensions for millions will be scrapped, replacing 42 plans with one points-based system for all workers. The new law would ensure that the value of the points would not diminish over time, he said.
The overhaul has been a central goal of Mr. Macron and Mr. Philippe, who have argued that getting the French to retire later and streamlining the pension system are necessary steps to put the system on a sounder financial footing.
Mr. Macron wants to unify the system and do away with the special pensions systems that date back decades, or even centuries in a few cases. He would give all workers points correlated to the number of years they work, and people would cash them in upon retirement.
Mr. Philippe argued that the government’s new universal plan was far more adapted to the contemporary realities of work: careers that are interrupted, that take place over several jobs and that start or finish at varying ages.
The government, he said, wanted to “guarantee the French a stronger and more durable social protection, because it won’t depend on the demography of professions, so that one’s professional choice won’t weigh on retirees. Our children will have less linear careers than ours. We’ve got to give them confidence that our system no longer seems to privilege some over others.”
Aurelien Breeden contributed reporting.Aurelien Breeden contributed reporting.