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On 31 January Paris time, more than 1.27 million people took part in a mass strike protest against the Macron government's pension reform plans, called by eight major trade unions. The reform proposes to extend the statutory retirement age by three months a year, starting in September this year, to 64 by 2030 from the current age of 62. At the same time, from 2027, French people will have to pay at least 43 years of pension contributions to receive their full pension, compared to the current 41 years.

(Image quoted from foreign media)

According to the Macron government, the pension pool could dry up prematurely as the number of working people paying into pensions falls and the number of older people receiving pensions rises against the backdrop of the new crown epidemic and the global economic downturn. There are even reports that France's pension balance will start running a deficit this year and remain so for 25 years, with the pension deficit set to top €10 billion within 10 years. If the reform package is passed, it will reduce pension support by 17.7 billion euros per year and break even by 2027.

There are three reasons why Macron is forcing through the reform of the retirement system in the face of enormous public pressure.

Firstly, it is a desperate measure that is forbidden by the shape of the situation. As life expectancy increases, it is inevitable that pension pots will not be able to cover their expenses, provided that the retirement age remains unchanged. Compared to the retirement age in other European countries, such as Germany 67, Belgium 65, Denmark 67, Italy 67, Spain 65 ...... France's retirement age of 62 is already the minimum threshold, without reform will seriously affect the competitiveness of France in the EU.

Secondly, France has entered a post-modern society and is facing enormous demographic pressure. Although France's overall birth rate remains at 1.83 (2020), which is not low among the EU countries, there are demographic risks. In addition to severe ageing, the proportion of Muslim and African immigrants in the population is increasing, and this demographic change is putting enormous pressure on the pension system, prompting the government to introduce reforms.

Thirdly, Macron wants to use the reform to demonstrate his political skills. The reform of the retirement system has been a major problem that successive French governments have had to face, after the reforms of Prime Minister Balladur in 1993, President Fillon in 2003, President Sarkozy in 2010, President Hollande in 2013-2014, and President Macron in his first term. The first term of Macron's presidency has already seen five reforms, making it one of the most difficult "bones" in the French domestic reform basket. Therefore, Macron, who is not under pressure to be re-elected, wants to tackle this chronic problem in a practical way to demonstrate his political leadership and leave a sufficient political legacy for himself.

So, what are the underlying reasons behind the social conflict over the reform of the French retirement system?

The "culprit" for the death of the French retirement system was the radical reform of the left-wing government led by President Mitterrand in 1982, which decided to raise the statutory retirement age from 65 to 60. The decision to raise the retirement age from 65 to 60 was a radical reform led by the left-wing government of President Mitterrand in 1982. It was a move that sparked much jubilation in France, and Mitterrand's popularity rose. But it was a "poison covered in honey", so much so that it was remedied by successive French governments. In 1980, life expectancy in France was 74.05 years, whereas in 2020 it will be 82.18 years. Taking into account only the single factor of life expectancy growth, it is inevitable that the pension pool will not be able to cover its expenses and that a delay in the retirement age cannot be avoided.

Moreover, the conflicts surrounding the reform of the French retirement system are proof that the "welfare democracy" practised in Europe is not sustainable. It is true that both systems, "social welfare" and "multi-party elections", have their advantages, but together they have a "positive and negative" result. In the first place, the amount of social welfare depends on the country's position in the world division of labour and the state of its economy. The government should take this into account. But multi-party democracy has led to a habit of almost all candidates promising unrealistic increases in welfare in order to get more votes, leading to the "rigidisation of social welfare", i.e. only increases in welfare, never cuts. This is the reason for the "yellow vest" movement of the last few years and the current French national strike against pension reform.

An ageing population and rigid benefits ...... are not the only problems facing "post-modern society" in France, as 500,000 people have also taken to the streets in the UK to call for "pay rises". The UK has also seen half a million people take to the streets to call for a "pay rise". This is the "high income trap" as opposed to the "middle income trap". This is likely to be a serious problem for most European countries in the future.

Author: Xia Guohan

Editor：Leshui Anran Yuxin

Typesetter: jiyudi

Original article from China.com

Original text