Macron faces prolonged battle over pensions as labour unions dig in
THE biggest protest of French President Emmanuel Macron’s time in office is setting the stage for a prolonged, legacy-defining battle over pension reform, as neither he nor labour unions are leaving room for compromise.
More than a million people took to the streets on Thursday (Jan 19), led by labour unions opposing the 45-year-old leader’s plan to eliminate deficits in the pension system by raising the minimum retirement age to 64 from 62.
Emboldened by broad public opposition, the unions called for more action and disruption when the government presents its plan to the cabinet next Monday. They will hold another day of coordinated strikes and protests on Jan 31.
“This reform is unacceptable and against the interests of the population,” the labour unions said in a joint statement. “We are determined to have a fair retirement system, financed by a different way of sharing wealth.”
Efforts to overhaul the pension system by getting the French to work longer have often been the undoing of previous governments, who have been forced to back down in the face of protests that paralysed the country.
Now, a protracted confrontation will test the resolve of Macron, who has pitched pension reform as a vital step in his pro-business overhaul of the French economy.
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“We strongly believe that this reform is a necessity for France,” Finance Minister Bruno Le Maire said on Friday at the World Economic Forum in Davos. “So we will stick to that reform even if, of course, there will be a debate in the French parliament. There might be some improvements of the reform.”
Forging ahead despite resistance would expend political capital at a time when Macron is already weakened by lacking a majority in parliament. But backing down would put in doubt his credentials as a pro-business reformer and add risks to public finances, which are under pressure from a record debt burden nearing 114 per cent of economic output.
Whether the unions can hang on to the backing they have for strikes and protests is key to Macron’s next steps. Opinion polls indicated that they have huge support from the wider French population for now, with a poll by market research firm Ifop showing on Thursday that only 28 per cent backed the pension-reform plan.
Also fuelling the unions’ momentum is their rare unity on the issue of France’s normally fragmented labour movements. They have not joined forces to this extent since 2010, when they protested against former president Nicolas Sarkozy’s pension reform, said Jean Grosset, director of the social dialogue observatory at think tank Fondation Jean Jaures.
Sarkozy’s popularity never recovered, and the centre-right president was beaten in the 2012 election by socialist Francois Hollande, who pledged to roll back some of the changes.
“The reform passed, but it sent a shock wave through the country (that lasted) eight to 10 months,” Grosset said. “The government paid a high political price.”
In 1995, then-prime minister Alain Juppe abandoned his pension-reform plan after strikes brought the country to a halt for about a month.
Macron has already backed down once on pensions. In 2019, he dropped a plan to streamline the country’s complicated systems after some of the longest transport strikes in French history. His government at the time said it hit pause and then abandoned the plan because of the Covid pandemic.
But this time, Macron has indicated that he will not budge.
He has argued that making the French work longer was essential to boosting relatively low employment rates among seniors, and avoiding persistent deficits in a public system funded by worker contributions.
While his government has indicated that there could be minor tweaks to the plan when it is debated in parliament in February and March, it also said that any changes must be financed. This has made scrapping the change in minimum retirement age unlikely.
“For the pact between generations to be fair, this reform needs to be implemented,” Macron said on Thursday. “So we’ll do it with respect and in dialogue, but with determination and a sense of responsibility.” BLOOMBERG
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