24 Europe The EconomistDecember 14th 2019
21financial regulations. On December 5th eu
negotiators struck a provisional agreement
on what financial products are deemed
“green”. Next year large European compa-
nies will be forced to disclose more infor-
mation about their impacts on the envi-
ronment, including carbon emissions.
These measures, the thinking goes, will
give clearer signals to markets and help
money flow into worthy investments.
Another lever is the European Invest-
ment Bank, a development bank with
about €550bn on its balance-sheet, which
is to be transformed into a climate bank.
Already it has pledged to phase out financ-
ing fossil fuels by 2021. By 2025 Werner
Hoyer, its boss, wants 50% of its lending to
go to green projects, up from 28% today,
and the rest to go to investments aligned
with climate-change goals. Some of that
money will flow into a “just transition”
fund, worth €100bn over seven years. Job
losses are an unavoidable consequence of
decarbonising Europe’s economy; the coal
industry alone employs around 250,000
people, mainly in eastern Europe. The fund
will try to ease some of this pain, and the
political opposition it provokes.
The Green Deal goes beyond the scope
of previous climate policies. One area it en-
ters with gusto is trade. Under the commis-
sion’s proposals, the euwill simply refuse
to strike new trade deals with countries
that fail to comply with the Paris agree-
ment’s requirement that signatories must
increase the scale of their decarbonisation
pledges, known as “nationally determined
contributions” or ndcs, every five years.
That would mean no new deals with Amer-
ica while Donald Trump is president; it is
set to drop out of the Paris agreement late
in 2020. And, because the first round of en-
hanced ndcs is due next year, it would put
pressure on countries that are dragging
their feet on these, of which there are doz-
ens—including China and India.
The deal also sketches out plans for a
carbon border-adjustment levy. Under the
eu’s emission-trading scheme, large in-
dustries pay a fee of about €25 for every
tonne of carbon dioxide they emit. Other
regions have similar schemes with differ-
ent carbon prices. A border-adjustment
mechanism would level the playing field.
The Green Deal’s proponents are the
first to say this is only a road map for cli-
mate action. Many, many new policies and
associated technical details will need to be
ironed out and approved. Mrs von der
Leyen declared the Green Deal “Europe’s
man-on-the-Moon moment”. In reality, the
landing is some way off yet. A more fitting
analogy for this week’s announcement
would be President Kennedy’s promise in
1961 that America would, by the end of the
decade, reach that celestial body. It re-
mains to be seen whether Mrs von der
Leyen’s word is as good as Kennedy’s. 7Finland now has the world’s youngest serving prime minister. On December 10th Sanna
Marin (pictured, second from right), who is 34, was sworn in at the head of a coalition
whose four other component parties are also led by women. Three of them are also in
their 30s. Strikes toppled the previous prime minister last week.Finland’s new governmentA
fter monthsof talks, endless delays
and a week of disruptive strikes, the
French government finally unveiled on De-
cember 11th its long-promised pension re-
form. The good news is that it has decided
to press ahead with its plans, including the
abolition of regimes with special privi-
leges, despite the biggest show of union
force on the streets since President Em-
manuel Macron took office in May 2017.
The bad news is that the new system will
push the full burden of the changes on to
France’s younger generations.
In a speech that leaned studiously to the
left, Edouard Philippe, the centre-right
prime minister, described the new univer-
sal points-based system as a “fairer” sys-
tem that will guarantee “social justice”. It
will replace the current sprawl of 42 re-
gimes, most of which have different rules.
For those beginning their working life, the
new rules will apply from 2022, and from
2025 for those already in work but cur-
rently under the age of 45. Older genera-
tions will keep the existing rules. Sliding
transition rules will bring the new system
fully into effect by 2037.
Under the new system the special re-
gimes, which today allow train drivers toretire at the age of 50, will be abolished.
Pensions for public-sector workers will be
calculated according to the same (less fa-
vourable) rules as those in the private sec-
tor. The new points-based system will al-
low those with patchy careers, including
many women, to accumulate credit for ev-
ery hour worked. A minimum monthly
pension of €1,000 ($1,100) will be brought
in from 2022, to help farmers and others
currently surviving on less. High earners
will pay extra contributions for the pen-
sions of others. And, although the mini-
mum legal retirement age will remain 62, a
new “equilibrium age” of 64 will build in
incentives to work beyond that. Medef, the
bosses’ federation, described the package
as a “good balance”.
Will this moderate approach help to
calm the streets? Mr Philippe made it clear
that he will not shelve the project altogeth-
er, as the unions want. Since December 5th
sncf, the national railway, as well as re-
gional trains, the Paris metro and airport
ground staff, have been on a rolling strike
that looks likely to continue. Teachers are
staging walkouts every few days. The un-
ions know full well that past French gov-
ernments have backed down in the face of
paralysing strikes. Alain Juppé, prime min-
ister in 1995, famously insisted that he
would hold firm in the face of industrial ac-
tion, only to cave in and shelve his own
pension reform a few weeks later.
Mr Macron is keen to prove that he is
different. He has long argued that France
needs to be “transformed” rather than
merely “reformed”. This is why he prom-
ised during his election campaign in 2017PARIS
A long-promised pension reform
defers new rules to future generationsPensions and strikes in FranceOK boomer