European Central: Macron Enrages Citizens With Pension Reform
Nathan Laine
Pension reform was signed into law in France, and it has been a controversial process every step of the way. Despite many European nations increasing retirement ages recently in order to keep their pension systems solvent. Unions proposed making companies and wealthier citizens in France pay higher taxes in order to fund the pension system, yet President Macron saw raising the retirement age as the only possible solution. While some protests have been peaceful in France, there has also been destruction including the city hall in Bordeaux which was set on fire.
Brief Overview Of Pension Reforms
Only a few weeks after ringing in the new year, protests started regarding pension reform in France on January 19th. This is the first time that trade unions worked together to organize mass protests since 2011 when the retirement age was raised from 60 to 62. Unions are preoccupied with what will happen to workers who start working very young or work in jobs that take a heavier physical toll on their bodies which may make it difficult to work to 64. France’s Interior Ministry estimated that 1.12 million citizens took part in the protest while the CGT Union claimed 2 million people participated and 400,000 protested in Paris. The General Confederation of Labour (Confédération générale du travail – CGT) has 690,000 members and was founded in 1895. Police planned for only 550,000 to 750,000 protestors which can explain why so much chaos has occurred due to being ill-prepared.
Protests have led to large disruptions in the nation with energy production even falling due to workers striking. Over 10,000 tons of trash accumulated in Paris due to garbage collectors on strike. Tensions grew as some strikebreakers from southern France were used to pick up trash in Paris. Additionally, some flights were canceled due to an air traffic controllers’ strike.
President Macron attempted to appeal to citizens’ sense of independence by declaring pension reform important to avoid dependence on foreign nations. Protestors however remain enraged over the pension reform. President Macron also remains firm in his plans to reform the welfare system with a proposal to require recipients of welfare payments to work 15-20 hours a week in order to continue to receive assistance.
While pension reform was not his first priority after his reelection, it was a campaign promise. Despite this, he still beat Marine Le Pen in the second round of the election. Now however, polls show Marine Le Pen would win, clearly reflecting the displeasure of voters over pension reform, yet voters still chose Macron on the ballot when the focus was not pension reform and French citizens considered the candidates overall. As Macron is ineligible for reelection after this second term in office, his approval rating is not as crucial as it would be for a politician looking to win over voters. As of April 6th, Macron had a disapproval rating of 69 percent. President Macron was going to attempt to pass pension reform in 2019 yet gave up in 2020 when the nation was preoccupied with the pandemic.
The Usage Of Controversial Article 49.3
While it may seem surprising that pension reform was passed without the approval of the national assembly (lower house in the French Parliament), this is possible after deliberation is held in a cabinet meeting due to Article 49.3 of the French constitution. This is a result of French history and the desire to maintain political stability. Parliament can respond by filing a motion of no confidence which they did with the pension reform legislation, yet the motion failed. The last time a motion of no confidence succeeded when Article 49.3 was used was in 1962, 4 years after the current constitution was adopted. Current Prime Minister Elisabeth Borne has also used Article 49.3 ten times to pass budget bills. Last year in late October, Prime Minister Borne used Article 49.3 twice in 24 hours. President Macron himself however did not invoke Article 49.3. Instead, it was Prime Minister Elisabeth Borne
France’s Constitutional Court approved the pension reform allowing it to go into effect. Trade unions tried to convince Macron after the ruling not to sign the pension reform into law to no avail. They reasoned that several concessions given to trade unions included in the pension reform were struck down by the Constitutional Court. One example is the senior index, which would urge companies with a minimum of 1,000 employees to hire more employees who are 55 years old and older.
Critics of Article 49.3 view it as undemocratic due to not allowing politicians elected by the people to represent them the ability to vote on legislation. The use of Article 49.3 is also criticized due to passing legislation without giving appropriate time for debate on the bills before they are passed without the approval of members of parliament.
The Role Of Life Expectancy
The retirement ages not only in France but other nations have continued to be increased due to workers living longer. The more years workers pass in retirement costs the pensions systems more money. Currently, men in France live for 23 years in retirement, second only to men in Luxembourg. Women in France spend 27.1 years in retirement, third after Greece and Spain. As life expectancies continue to increase, European nations continue to expect to increase the minimum retirement age to finance pension plans. The longer an employee spends in retirement, the more the government must pay them. Instead of cutting off pensions after a certain number of years, governments opt for raising the minimum age when employees can start to receive payments.
Low fertility rates also put more pressure on pension systems as this means fewer workers will be available in the future in order to pay for the benefits of a larger number of retired citizens. Since 2006, only three European Union member states (Bulgaria, Italy, and Latvia) have seen a decrease in the number of recipients of a pension while Hungary was even and the rest of the nations in the bloc saw an increase. In France, the number of pension recipients increased by 20 percent since 2006. The total expenditure for pensions in France in 2020 was equal to 13 percent of the national GDP, the third highest ratio in the EU only after Greece (14.5 percent) and Italy (14.1 percent). The fertility rate is highest in France (1.84) when compared to other European nations yet is still below 2, meaning parents are not at a minimum replacing themselves.
Pension reform that involves raising the retirement age is never a popular solution for voters, yet sometimes it is necessary in order to keep the pension system from collapsing. However, pension reform should be accomplished in a way that is as democratic as possible, particularly given the current political climate. Democracy has been on the decline and the last thing needed in Europe is one of the continent’s democratic strongholds seen as acting in an authoritarian manner. The European Union is concerned about democratic backsliding in some Eastern European member states, yet they can try to point at President Macron and how he passed pension reform.
