France

Government faces opposition over pension reforms

Article published on the 2008-04-28 Latest update 2008-04-28 13:54 TU

French Employment Minister Xavier Bertrand
Photo: AFP

French unions are already planning their protests against the government's new pension reforms. With traditional union marches on 1 May approaching, it looks like the latest attempt by the Sarkozy government to shore up France's empty coffers could be the theme of the traditional May day parades.

The main pillar of the pension scheme proposal, which was sent to unions last night, aims to increase the period for which workers must contribute to their pension fund from the current level of 40 years, to 41 years.

Unions claim that the plan penalises workers rather than asking companies to make more of an effort to bring older people into the workforce and to contribute more towards financing pension funds.

"There were other ways of doing this, but the government didn't take any of them into account", said Jean Claude Mailly of the Force Ouvrière union. "With the current plan, who comes out of it best? The bosses. They're not asking businesses to make any effort," he continued.

Unions suggested increasing pension funds by taxing stock options, which could add an estimated three billion euros per year to social security finances. These suggestions were not included in the package, which is due to come into effect gradually by 2012.

Businesses will also have to make bigger efforts to bring older people into the workforce. Only 38% of people aged 55 to 64 are employed in France, well below the EU average of 43%. When the new scheme comes into place, companies will face sanctions if they do not reach targets for employment of older workers.

The pension scheme is part of an overall plan to reform France's labour market promised by President Nicolas Sarkozy during his election compaign under the banner "work more to earn more". Union leader Jean Claude Mailly described the latest reforms as "work more to earn the same or less". The government response is that a higher contribution from employees is the only realistic answer to longer life expectancy.

A poll today shows that a small majority of French people oppose the reform, with 48% against and 46% supporting the new measures.