personal finance

Macron wants not just reform but to change the way France thinks | John Lichfield

Pensions reform in France is like the rumbustious games of proto-football played by whole towns in England and Scotland of the past. At regular intervals – most recently in 1993, 1995, 1999, 2003, 2007, 2010 – the French government competes against a large part of the country’s population. After days or weeks of confused conflict the two teams retire, exhausted. Small concessions of ground are made. No clear goals are scored by either side.

The only exception was 1995 when the France v Jacques Chirac and Alain Juppé game went into prolonged extra time (three weeks of transport strikes) before the government caved in more or less completely. A rare, undisputed goal for “the people”.

The other recent pensions battles, from 1993 to 2010, have ended in draws, with radical reforms withdrawn or avoided in favour of patch-up jobs to keep the country’s sprawling, Kafkaesque state pensions system limping along for another few years.

Enter, stage centre, an ambitious young man, more visionary than politician, who decides that he can succeed where his feeble predecessors have failed.

There is no especially pressing reason to reform the system – or the 42 different systems – right now. The jumble of regimes, supposedly funded by levies on workers and employers, are not losing too much money. The €8bn in annual subsidies from the taxpayer are more or less affordable (even the €3bn that goes on allowing railway workers to retire in the prime of life).

But Emmanuel Macron wants not just to reform France. He wants permanently to change the way that France thinks. His other social reforms, including more flexible employment laws, have been a success. The country is creating jobs hand over fist. He has, more or less, fought off the gilets jaunes movement without doing a great deal for the struggling small towns and outer suburbs where it began.

A sensible, practical politician might decide that he should drift prudently to the presidential election in 2022, tilting at the broken windmills in Europe and Nato but leaving domestic policy alone.

Not Macron. He has declared holy war on the pensions system in his election campaign in 2022. The jumble of conflicting rights (in which the poor sometimes subsidise the well-off) is an offence to his abstract sense of order and justice.

A woman holds a placard of Macron captioned ‘The Fall’ during pensions protests in Marseille.

A woman holds a placard of Macron captioned ‘The Fall’ during pensions protests in Marseille. Photograph: Clement Mahoudeau/AFP via Getty Images

He also disapproves of the fact that France, overall, works less hours than any other OECD country. Early retirement is a principal reason. The official pension age is 62 but railway, electricity and some other workers retire on generous pensions in their early or mid-50s.

In any case, pensions reform has become the great symbol of a supposedly immovable France. It is, Macron believes, a dragon that must be slain if the country is to be prepared for the opportunities and cruel tests of the 21st century.

Macron’s government produced the broad outline of its pension plan in July. There would be a single system instead of 42. Each employee would build up a personal fund of “retirement points”, which could be transferred from job to job and would be based on an average of earnings. No one would get less than €1,000 a month. The new system would take effect fully in 2025.

The result was cacophony. Everyone was angry. Rail workers and others were going to lose their sweetheart deals. Teachers, nurses, doctors, lawyers, police, civil servants and others would lose the deals by which pensions are calculated on final earnings not a career average.

For months, the government’s efforts to sell the proposals were strangely half-hearted and disjointed. The moderate unions, who accept the principal of reform, became angry and confused. The militant unions smelled blood – and a route back to influence and power. The gilets jaunes, in their original anti-political form, had rejected France’s much divided trades unions movement as useless and corrupt.

Militant unions and left-wing and hard-right politicians pummelled the proposed reforms with attacks ranging from the reasonable to the fictitious: Macron wanted people to work longer (true) and wanted to cut everyone’s pension, including those already retired (not true).

And so with the transport strikes starting last Thursday there began a new round of pensions proto-football, “the government v a large part of the people”. Will anyone win this time? Macron and his government are already looking for ways to declare a draw in talks with the unions tomorrow. The prime minister, Édouard Philippe, will offer to delay the de facto start of the new system to 2035 or maybe even 2039. That would be three or four presidential elections away.

What would be the point of such a slow-motion reform? A faint symbolic victory for Macron. What would be the point of the unions refusing such a slow-motion reform? To defeat Macron and to be seen to defeat him. It may be a long, hard winter in France.


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