For months, the coverage of France that has filtered through to the UK has consisted almost entirely of coverage of the residual Gilet Jaunes movement, Macron’s “Jupiterian” Brexit approach, and the actions of the French unions. It is in the latter that this article is anchored.
Last Saturday, prime minister Edouard Philippe announced the use of article 49.3 of the French constitution (a provision which passes the law unless a motion of censure passes in the three days after its use) to pass the controversial pension reform that had been spelt out the year before. Done in response to opposition parties putting over 41,000 amendments before the national assembly, it would at first appear a strong move had it not been for the major concessions already made.
Original hopes for what appeared to be an ambitious pension reform can be thought of in three main categories.
The first being the elimination of the vested interests that have driven specific retirement ages and pension pay-outs to unsustainable levels through decades of industrial action. With ballerinas retiring at 42, train drivers at 52, and with average pensions of over €3,000 a month, sectoral interests have been allowed to dominate. This is in spite of the easy potential for automation, with two of the regional metro lines operating in Île-de-France already being driverless, and a transition to completely driverless being financially beneficial but impossible to even contemplate due to strike action.
The second, the elimination of the all-imposing pension deficit which threatens to be up to €17.2bn (£14.9bn) in just five years, has to be a huge priority.
The third, the huge inequalities within the system with lawyers paying in half the contributions of doctors thanks to their proximity to power. The tragedy of the French pension systems is a tragedy of vested interests.
Perhaps if he hadn’t raised expectations from the beginning with the appointment of the valiant Muriel Pénicaud, the ex-head of human resources for Danone who had been forced to battle against unions to boost the efficiency of the business, and who had succeeded in 2018 in her more limited vanquishing of the unions to the role of labour minister in 2017, the current reform would not seem so disappointing.
Deeply lacklustre, despite the sharp criticism from both leftist voices and statist right-wing parties, it merely replaces 42 pension systems with a single pension system with 42 exceptions and is riddled with aptly named grandfather clauses.
The “pivot age” (the age, 64, at which retirement would have been possible but without a full pension) that had been proposed, itself a compromise to avoid the ire of raising the retirement age, was withdrawn.
The universality of the system itself was eliminated in order to win over the unions, with eight occupational categories being partially opted out (these categories being the ones most likely to grind the country to a halt), and twelve more offered special treatment.
Adding to all this, the mediocre reform that is on offer will not be fully implemented until 2037 (far beyond the 2025-2027 range at which the pension system needs to be financially balanced), by which time the reform will be redundant and in need of updating even more drastically in order to ensure the sustainability of the pension system.
With a 14 per cent cap of GNP on pension funds, the payouts will either have to begin to fall rapidly in the 2030s or the retirement age will need to rise rapidly. By kicking the can of dealing with vested pension interests (and the five major unions with their varying militaristic tendencies) into the long grass, Macron has weakened the future of France to his people’s detriment.
To be clear, unions are not bad things, particularly when integrated in a German or Swedish fashion, but allowing them to dictate the policies that will impact generations to come is both anti-democratic and economically detrimental.
Macron had so much promise – a promise to serve as a doctor to the French economy, injecting neoliberal policy solutions to the benefit of his country. Sadly, he has gone but halfway towards where France needs to be.
While the falls in unemployment to a ten-year low are impressive, his failure to fully confront the unions and push through the necessary reforms to create a full regime of “flexicurity” must lead us to a clear conclusion: Macron is no Thatcher. Let this be a lesson to our own country about the results of letting vested interests, including the civil service, dictate policy.
