During his wishes, Emmanuel Macron called for an application of the “new rules” pension reform “from the end of summer 2023”. The discussions around the postponement of the legal age of departure – despite a system currently in excess – promise to be tense: the president himself spoke out against this measure in 2017. In order to “find a compromise”, Prime Minister Borne received the social partners this week; the government will unveil its explosive bill, which promises to be in line with the recommendations of the European Union (EU).
Postponed several times, the presentation of the reform of the pension system will take place on January 10, 2023. The main lines of the project have not changed. Since his re-election, the head of state has been determined to increase the legal retirement age from 62 to 64, or even 65. Purpose ? “Ensuring the balance (of the) system for the years and decades to come” et “consolidate” the pay-as-you-go system, according to Emmanuel Macron.
2023: the year of a flagship reform for the executive
Received on the set of France Info Tuesday, January 3, Elisabeth Borne detailed a few proposals, including the establishment of a minimum pension amount of 1,200 euros. Only new retirees would be affected: “My priority is that the working people, who will have to work a little longer, benefit from this revaluation”.
The government also wants to put an end to special schemes and take into account the longest careers in the calculation of pensions as well as the arduousness of certain professions, as the Prime Minister explains in a tweet published on her account.
Clarification of the pension reform project:
▪️ The age of cancellation of the discount will remain at 67 years old
▪️ For a full-rate pension, the contribution period will not go beyond 43 years
▪️ The minimum pension for a full career increased to 85% of the SMIC, i.e. nearly €1200 pic.twitter.com/XG66UAjxOs— Élisabeth BORNE (@Elisabeth_Borne) January 3, 2023
Postponement of the legal retirement age: the divisive point
Moreover, the idea of pushing back the legal age of entitlement to a pension from 62 to 65 does not“not a totem”, attempts to reassure Borne. But this central measure is indeed in the program of Emmanuel Macron, who recalled it in his speech of December 31: “ We need to work more. This is the meaning of this reform for which the government, the social partners and Parliament will work in the coming months. (…) New rules (…) will apply from the end of summer 2023”.
The idea of working longer in order to “consolidate (the) pay-as-you-go pension scheme” does not seem to convince the union representatives. The secretary general of the CFDT, Laurent Berger, has already assured that his union would mobilize against a postponement of the legal retirement age to 64 or 65 years.
The different positions held by the President of the Republic in recent years do not facilitate negotiations around his project…
Candidate Macron 2017 versus President Macron 2023
On July 6, 2021,The Obs recalled in a YouTube video the campaign promises of candidate Macron in 2017. He then expressed his wish not to postpone the legal retirement age, set at 62 years. A wish that he reiterated at the end of the Great National Debate in 2019.
The latter did not want such a step back at the time, because he was committed to it (“It’s better to do what we say…”) but also because he preferred to implement a universal points system, since abandoned.
Macron also insisted on the existence of structural unemployment in France, so he called shifting the legal age a “quite hypocritical” and also underlined the professional difficulties encountered by seniors: “After 55 years, we no longer want (them)”.
Pension system: a budget deficit or surplus?
Concretely, would the reform project consolidate the pension system, currently financed on credit? On December 15, 2022, the Pensions Advisory Council (COR) presented the ninth edition of the annual report on the evolution and outlook for pensions in France. This report establishes that the pension system records a surplus of 900 million euros in 2021. In 2022, the surplus should amount to 3.2 billion euros.
However, from 2022 to 2032, again according to COR projections, the financial situation of the pension system would deteriorate: “From 2022 to 2032, the situation of the pension system would deteriorate with a deficit ranging from -0.5 point of GDP to -0.8 point of GDP depending on the agreement and the scenario adopted.. More precisely, the deficit should be between 7.5 and 10 billion euros in 2027 (0.3 to 0.4 point of GDP) to climb between 12.5 billion and 20 billion by 2032 (0. 5 to 0.8 point of GDP).
These figures may seem alarming, but for comparison, the latest annual public report from the Court of Auditors published in February 2022 indicated a rise of 560 billion euros in public debt between the end of 2019 and the end of 2022 – thus weighing about 113% of GDP. On February 16, 2022, the Ministry of Finance estimated the amount of the Covid-19 bill at 140 billion euros.
With regard to estimates beyond 2032, the COR forecasts a deficit whatever the economic scenario adopted, but nevertheless underlines the strong uncertainties that surround its projection work due to the international context. Nor does the Council assess the need for any reform. Is this assessment rather left to authorities located outside of French territory?
A reform imposed by Brussels?
The European Commission formally denies imposing any “constraint” reform on France, such as wanting to push back the retirement age: “The European Union encourages France to reform its pension system, to make it fairer and ensure its viability, but it does not impose it“. She also assures that “ payments of recovery plan funds to France are not conditional on a reform of the pension system ” (communication extracted from an article published on its official website on October 17, 2022).
However, in an article published on April 27, 2021,Public Senatereturns to an exchange between the current Minister of Labor – and former Minister of Public Accounts – and the Senate. A 700-page document is discussed before Parliament, before being sent by Olivier Dussopt to the European Commission in order to define the National Recovery and Resilience Plan. It is about the use of the 40 billion gradually paid by the EU for economic recovery.
If no reform project appears “ in a dated way, nor in a precise way in its perimeter and in its nature ”, insists Minister Dussopt, the “will”of the government in terms of pension reform is recalled.
With watermark, as describedPublic Senate, the need for the EU to be able to give its agreement and verify that the project does indeed coincide with European strategy and its expectations in terms of structural reforms. Much more than an “encouragement”.