What is the situation of France and Macron after months of social clashes over the pension?

From the “mad parliamentary day” of mid-March, as described by Libération, in which French President Emmanuel Macron “leaped over” a branch of the parliament to approve the controversial pension reform, five months have passed and now the law is about to come into effect.

It will indeed become effective from September 1st, despite the violent protests that have occurred for months on the streets of Paris and across the country.

Here’s what’s changing and being said in France, according to StartMag.

MONTHS OF CHAOS CULMINATING IN THE “MACRON DICTATORSHIP”

The implementation of the unpopular pension reform in France, which includes raising the retirement age to 64, comes after months of union mobilization, million-person marches, chaotic sessions in the National Assembly where voting was impossible, confusing communication from the government, and finally, the adoption of the law made possible only through Macron’s firm stance. He invoked Article 49, Section 3 of the Constitution, a special power that allows bypassing parliamentary debate. However, no one will forget the months of union mobilization, the marches, the even violent clashes, and the disconnect between the people and the government witnessed in recent months. France is no longer the same.

WHY IT’S NECESSARY ACCORDING TO MACRON

The decision to resort to this extraordinary measure to get the reform approved was justified by Macron citing “financial risks.”

According to the Élysée Palace resident, without the reform, the inflationary context, rising interest rates, and financial market fluctuations would endanger France’s future. “My political interest would have been to go to a vote. Among all of you, it’s not me who risks losing my position or seat,” he reportedly told his ministers during those tumultuous days, “but I believe that, at the present state, the financial and economic risks are too high… We cannot play with the future of the country.”

In the end, the interest rate increase decided by the ECB doomed French pensioners, at least according to the Macron government.

WILL IT BE DECISIVE?

Even during the protests, many experts argued that France wasn’t undergoing a financial crisis of the magnitude described by Macron, and therefore, there were no conditions to justify the use of special powers. They believed that it would only further damage his image. To date, according to surveys reported by Les Echos, French citizens’ trust in their president has remained stagnant at 29% for two months, and the percentage of those who don’t trust him remains at 65%, while 40% of the population claims not to trust him at all.

However, the Conseil d’orientation des retraites (COR), an independent and pluralistic advisory and consultation body, which includes social parties, and is tasked with analyzing and monitoring the medium- and long-term prospects of the French pension system, has added fuel to the fire regarding the reform. In June – and therefore “retrospectively,” as emphasized by L’Observateur – it stated that the reform “will not prevent the general pension system from going into deficit by 2030.” This contradicts the government’s assertions justifying the “mother of all reforms.”

COR’S FORECASTS

However, there’s a “but.” According to COR’s forecasts, although the reform isn’t capable of achieving the executive’s goal, without it, “the situation would be worse.” By slowing down the pace of retirements, the number of pensioners would be limited (280,000 fewer retirees in 2030 compared to the scenario without the reform), thus containing costs.

The most optimistic scenario put forth by COR in June states that: “After two years of surpluses, France’s pension system will return to deficit from 2024. Until 2030, the deficit would be between 0.2 and 0.3 percentage points of GDP, which is between 5 and 8 billion euros per year. However, this is less than half of the previous forecast, which predicted a deficit of 0.4% of GDP in the absence of reforms.”

These forecasts, notes Bfmtv, have drawn criticism from some government members, who question the reliability of COR’s work. Foremost among them is Economy Minister Bruno Le Maire, who criticized the organization for changing its evaluations “every six months,” and said that he takes these forecasts “with caution.”

WHAT DOES THE PENSION REFORM IN FRANCE ENTAIL?

So, what are the key points of the pension reform in France? As explained by Le Figaro, the main measure is the gradual increase in the retirement age, which will go from today’s 62 years to 64 by 2030, at a pace of three months per year.

Additionally, there will be an immediate increase of 100 euros gross per month for the minimum pension for employees, traders, and farmers who have worked their entire lives with a minimum and full-time salary.

The regime for “long careers,” which allows for early retirement for those who started working at a young age, has also been revised. Now, it will be open to those who began working before the age of 21 (instead of 20) and will have four age limits for access, compared to the current two.

Among other measures, as stated on the French government’s website, there will also be the possibility for some parents to increase the amount of their pension by 1.25% for each additional quarter worked between ages 63 and 64, which means 2.5% for two quarters and up to 5% for a full year.

Scenarieconomici.it: The smart choice for economic news. Follow us on Telegram and stay updated on the latest trends and developments in the global economy CLICK ON THE LINK