A Touch of Margaret Thatcher in the Élysée

MB – 04/2023

France is once again in turmoil and the French people are fighting back against President Emmanuel Macron's pension reforms.

The protest is being expressed through large-scale demonstrations on the streets that are not always non-violent. The French trade unions had a decisive influence over this.

But there was also no agreement in the French parliament, which is why the president's government has taken a special path. The French Constitutional Council approved the pension reforms as far as possible on April 14, 2023 and it came into force on the day after it was signed by the President.

Is there really a need to reform pensions?

The actual retirement age in the general system is 62 years of age for people born after 1955. Under this reform the entry age will be gradually raised to 64 years as from September 2023 and this will be completed by 2030. The number of contribution quarters – in France they call them trimesters – will also be increased from 168 (42 years) to 172 (43 years) by 2027 as this number of trimesters is needed for a pension without any deductions.

The "Conseil d'orientation des retraites” supervisory body does not consider the aforementioned adjustments to be necessary from a purely financial point of view, because revenues are and will remain stable. Whether the aforementioned objectives will prove to be effective is questionable as the average retirement age is already more than 62 years and the trend is continuing to rise. Insured people will still be able to take early retirement if they entered working life very early, have been insured for more than 40 years and had already worked a certain number of trimesters before reaching the age of 16 - 20.

Strong trade unions

A strong wind is blowing against the president and his government through the united opposition of the French trade unions, which are now united as rarely seen before. This is partly due to the fact that the government was probably not willing to negotiate with the social partners.

This unity has resulted in the unions successfully organising demonstrations that were either supported by all workers or only by specific occupational groups that had an impact on the whole of French society (e.g. railways, refuse collection, refineries).

Political intrigue

The French president is sticking to his objective, especially as the European Comission has also called for corresponding reforms to be made in France. Macron wants to break the power of the trade unions like the "Iron Lady" once did. The government was unable to get the reform bill passed through parliament in the normal way, even though it was generally assumed that together with the conservative republican Members of Parliament (MPs), they would have had a corresponding majority in the National Assembly. The protests by the population made the conservative MPs change their minds, which is why the president invoked Art. 49.3 of the constitution which meant that the reform could be passed without a parliamentary vote and this fuelled even more protests.

Approval by the Constitutional Council has brought legal clarity, but the trial of strength will probably continue at the political level and on the streets.