The EconomistSeptember 14th 2019 331S
isyphus hadit easy, compared with
French pension reformers. The mythi-
cal Greek was damned eternally to roll a
boulder up a hill and watch it roll back
down again. But he never had to persuade
Gallic workers to retire later. In 1995
Jacques Chirac’s government shelved his
attempt to reform the system after weeks of
protests and strikes brought Paris to a
standstill. He tweaked it in 2003 but faced
protests of 1m workers and more. Nicolas
Sarkozy made a bit more progress in 2010,
but still not nearly enough.
Now Emmanuel Macron has put a cau-
tious shoulder to the boulder. On Septem-
ber 9th the president invited Laurent
Berger, leader of the Confédération Fran-
çaise Démocratique du Travail, the coun-
try’s biggest private-sector union, to talks
about pension reform at the Elysée palace.
His prime minister, Edouard Philippe, held
discussions last week with each of the big
unions and employers’ organisations.
After protesters wearing gilets jaunes
(yellow jackets) brought the country to a
standstill last year, a chastened Mr Macron
wants to be seen to be listening. Re-proached for his previously haughty know-
it-all manner of governing, he is keen to
avoid the impression that he is about to im-
pose new rules on an unwilling public. Yet
his caution raises questions about what,
and how much, this reform is likely to
achieve. The pension tsar, Jean-Paul Dele-
voye, made it clear in a report this summer
that the new system would not change at
all the overall amount that France spendson pensions.
Given the scale of the problem, this is
disappointing. The French retire earlier
than workers in any other oecdcountry
(see chart). Thanks to high life expectancy,
they enjoy an average of a quarter of a cen-
tury in their armchairs. Moreover, the
French pension system is hugely generous.
Retirees receive on average 61% of previous
earnings, pre-tax—less than in Italy (83%)
but far more than in Germany (38%).
This puts strain on the public purse, all
the more severe because the French system
relies on taxing today’s workers to pay the
pensions of their elders. In June the official
pensions advisory council warned that by
2022 the public-pension deficit would rise
to €10bn ($11bn), up from its previous fore-
cast of half that figure. Overall, France
spends nearly 14% of gdpon pensions, a bit
less than massively indebted Italy (16%),
but more than Germany (10%) and way
above the 8% oecdaverage.
The obvious way to close this gap would
be to raise the retirement age, as many oth-
er countries have done. In France, the most
recent effort to do this dates back to Mr Sar-
kozy. In 2010 he raised the minimum age
from 60 to 62 years, and the age for a full
pension (without penalties) from 65 to 67.
However, thanks to France’s monstrously
complex system, many people are allowed
to retire much earlier than this, so that the
male retirement age is, on average, still
only 60. One problem is that Mr Macron
campaigned in 2017 with a clear manifesto
pledge not to touch the retirement age.FranceRisking the rage of the aged
PARIS
Another French president tries pension reformLa vie en reposSource: OECDMen, 201650 60 70 80 90
France
Italy
Spain
Germany
Britain
SwedenEffective retirement age
Life expectancy at retirement ageEurope
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