You are here

Strikes against the French pension reforms

From thelocal.fr It was one of Emmanuel Macron's top items in his electoral manifesto back in 2017: France’s pensions system must be reformed. Obviously 'reformed' in the mouth of the former investment banker at Rothschild & Co. actually meant "fed to the private funds" and so, after a two-and-a-half-year wait, the government have finally revealed what they wanted to do with our pensions system, and the people have responded in protest. Demonstrations last week saw up to 1,5 million (CGT figures) in the streets protesting the plans, which apart from seeking a simpler system also seeks to reduce pension payments.

Now it must be said that France's pensions system is very complex. Whenever someone retires, they have to spend weeks if not months assembling all the paperwork needed for their pension. Depending on the branch they have worked in, on how many kids they've had, on whether they worked full-time or not, etc. etc. the French Pensions Agency will compute their yearly pension, which will then usually increase each year based on inflation. So that is the angle of attack the Macronists have chosen: "the system is too complex, let’s make it simpler!". Their solution? (a) collapsing the 40+ systems into a single-one and (b) making the new system a point-based one. Easy-peasy: when you retire, you have amassed a certain amount of points, and each point entitles you a given amount of euros per annum, to be established by the government.

The French may have voted Macron into power (but honestly did you see his opponents at the time?) but they are not stupid. They have immediately understood that (a) moving from the 40+ systems to a single one will necessarily leave aside the special provisions that people working in heavy industry or hospitals were entitled to (to compensate for their difficult working conditions) and (b) the value of the points might increase slower than inflation or even decrease since the government's report clearly states that “la valeur du point va pouvoir être ajustée pour équilibrer le système” (the value of the point shall be adjusted to keep the system [economically] balanced). Now in the neoliberal paradise the Macronists are building for us, with companies' taxes getting lower and lower, guess what will happen to the pensions point to "keep the system economically balance" Right answer: it'll decrease in value. The logic behind all this? Encourage people tocontribute to a private pensions funds, so as to keep a reasonable pension should the value of the point decrease - and make Macron's fat cat sponsors even fatter.

The response of the French has been unanimous and immediate. As with past general strikes, workers from the national and municipal companies have been the first to react with e.g. massive strikes and full closures in the railway system. And as with past general strikes, workers from privately-owned companies have stoically faced the very difficult transport conditions. Yet even people who've had to walk 3 hours under the cold rain have told reporters "We are enduring this to keep our pensions safe from privatisation", much to the dismay of reporters (all the private TV channels are owned by magnates who have financed Macron's presidential campaign in 2017, and even the public TV channels mostly support Macron). Now the government is trying to play the "evil strikes are going to ruin the holidays season" card but even this does not seem to work; polls still show over 62% of the French in favour of the strikes.

On 16 December, eleven days after the start of the strikes, the high commissioner in charge of the pensions reform has resigned, over his failure to declare outside income; a total €123,000 since he was appointed High Commissioner for Pensions in September 2017. It was extraordinary to read of Gilles Le Grendre, present of the La Republique En Marche (LREM) party in the National Assembly, describe the High Commisioner as having made a "courageous decision", as if breaching the French constitution was simply a minor technicality.

Despite this, the government is adamant the reform will happen, "after a round of discussions with the trade unions" - except that even the meekest trade union, Confédération française démocratique du travail (CFDT), has announced they would not be discussing with the government until the most controversial part of the reform (the increase of the standard retirement age from 62 to 64) is dropped. It is notable that at the time of the election, Macron promised to keep the pension age at 62. It was opponent, Fillion, who wanted to increase it to 65 (and Le Pen wanted to reduce it to 60). Prime Minister Edouard Philippe has offered a handful of concessions, reducing the effect on older and mid-career workers.

Whilst the strikes are on-going there are already many lessons to be learned from the experience. Firstly, there is the power of organised labour in France and indeed most of continental Europe, and something which stands in contrast to how weak the union movement is in countries like the United States and the United Kingdom. It is organised labour that has led the national campaign against this "reform", and they will be hoping to succeed like they did in 1995. Secondly, there is the neoliberal ideology laid bare, which looks at France's generous retirement age (lowest in the OECD) and generous pensions as a problem. The French people however consider it to be a good thing which should be celebrated and serves as an example for other countries to aspire to. Shouldn't socal and technological developments lead to a higher, rather than lower, standard of living? Finally, the neoliberals will counter, "how are we going to pay for this?"

In September 2017 the French government abolished the very modest wealth tax (impôt de solidarité sur la fortune), which was a mere 1.5% for net wealth above €10,000,001 of net worldwide assets, with the primary residence in France receiving at 30% discount. In 2020 the government is proposing income tax cuts, and a reduction in corporate tax rates. The income tax cuts will not address the substantial increases in bracket from lower to middle incomes, and then a flattening for higher income brackets. The finance minister, Bruno Le Marie, stated bluntly: "Raising taxes is not an option". But maybe it should be. As much as there is some justification for a simpler pension system, there is also justification for a improvement, rather than reduction, in pension rates. Tax cuts now for a reduced pension in an unequal society later? That does not seem to be a good option for the people of France.

Commenting on this Story will be automatically closed on February 20, 2020.