French PM defies unions with pension overhaul, strikes set to go on

Prime Minister Edouard Philippe defied striking workers on Wednesday with plans for an overhaul of France’s byzantine pension system that he said would be fairer and encourage people to work longer.

In a speech that followed days of street protests and strikes, 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.

One union leader dismissed the plan as “a joke”.

Philippe did however show some flexibility to unions over the timing of its implementation, saying anyone within 17 years of retirement would be exempt – a longer period than the five years initially envisaged.

Unions were nonetheless swift to denounce the proposals and showed no sign of backing down in a battle of political will that could make or break Emmanuel Macron’s presidency.

“The time has come to build a universal pension system,” Philippe said in a much-anticipated speech. “There is no hidden agenda. “We want to protect the purchasing power of the workers and pensioners of today and tomorrow.”

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

There would be a minimum pension of 1,000 euros ($1,102) 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 industrialized world, has proven a treacherous task for past and present governments.

A strike by public sector workers over the past week has crippled the transport network, closed schools and forced the cancellation of some flights.

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 and in particular it makes a mockery of those who are fighting today.”

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

The reform-minded CFDT union that is influential in the private sector and has so far stayed out of the strikes, said a “red line had been crossed” by setting 64 as the average age needed for a balanced pension budget.

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 labor market.

“We know our children won’t have the same linear careers we had and we need a pension system that allows that. We need to have faith in a system that is not deemed to favor one person over another.”

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.

With the strike over the reform in its second week, there were signs of mounting irritation among morning commuters as they grappled with a skeleton train and metro service in Paris.

The CGT union has called for further protests on Thursday and next Tuesday. Opinion polls have shown strong public sympathy for the strikers but long-lasting industrial action might jeopardize this.

“I’ve had it today,” said one frustrated traveler as he battled his way through a crowded platform.

Source: News Agencies