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OPINION AND ANALYSIS

ANALYSIS: What you need to know to understand why pension reform spells trouble in France

Imagine a country with 42 different state pension systems, where some retire at 50 and other workers are 'cheated'. There's trouble ahead in France, writes John Lichfield.

Published: 12 September 2019 15:12 CEST
ANALYSIS: What you need to know to understand why pension reform spells trouble in France
Previous pension reform efforts have sparked big protests. Photo: AFP

Imagine a country which has 42 different state pension systems. 

In this strange country, some workers, the lucky few, retire at 50. All, in theory, retire at 62. The average real retirement age is 63.

Some people, not necessarily rich, subsidise the pensions of others, who are not necessarily poor.

Certain state employees, such as railway and utility workers, ride on the cushions. Locomotive drivers retire at 50. Other railway and Metro and EDF-GDF employees leave work on full pensions at 55.

On the other hand, farmers and many other self-employed workers are, broadly-speaking, cheated.

Such a country exists. It is called France.

President Emmanuel Macron, not shy of a fight whatever else you may think of him, has decided that it is time that the French had a single state pension system.

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Former president Nicolas Sarkozy's effort to reform the pensions system sparked protests in 2010. Photo: AFP

This is the country’s sixth pension reform in 26 years and the most radical since a failed assault on the system by President Jacques Chirac in 1995. That attempt collapsed after public sector trades unions, especially the railway workers, brought the country to a standstill.

The barricades are being erected once again. Lawyers, joined by nurses, doctors, pilots and flight attendants, have called a day of action to defend their own state pension régimes next Monday.

Two of the bigger trades union federations – France has a dozen of them, remember – have organised protests on 21 and 24 September. There will also be industrial action on Paris' Metro and RATP systems on Friday over the plans.

The steam pressure of public anger appears less than it was 24 years ago. That may change. The Gilets Jaunes and their Black Bloc allies, after an invisible summer, hope to recover this month by surfing on a wave of pension reform unrest.

Why is Macron doing this? And why now?

The purpose of the reform is not primarily to save money. Previous mini-reforms have already put the state pension fund on a more or less sustainable footing.

The aim is to make the system fairer and less opaque and to persuade French people that longer lives must also mean longer working lives. The present “official” retirement age of 62 will be preserved but will become meaningless.

In the original plan to qualify for a “full” pension, you had to retire at 64 (with exceptions for arduous professions). If you retired earlier, your pension would fall. If you worked longer, it would increase.

This so-called “pivotal age” has now been abandoned by President Macron in a concession to the biggest and most moderate of the union federations, the CFDT.  He now suggests that a “full” pension could be earned by an agreed “full” period of contributions, which must be longer than the present 43 years.

Otherwise the plan remains the same.


Emmanuel Macron is determined to make the French pensions system clearer and simpler. Photo: AFP

Since the 1850s, France has had a “repartition” or “shares-for-all” system of state pensions in which the active pay for the retired. Macron wants to replace that with a “points” system in which each person builds up a personal pension pot during his or her working life.

He insists that only the rich will suffer and that many will benefit. This is misleading. Without changes, there will be more losers than Macron admits.

Under the present system, a state pension is based on the retiree’s best 25 years of earnings in the private sector and last six months of salary in the public sector. This would be replaced by a universal pension based on contributions made.

The unions point out, inter alia, that this will penalise people whose earnings grow with promotion or experience, such as teachers and nurses. The government should look for a solution to this and other problems in the public consultations promised before its draft law is presented some time next spring.

Macron is right to insist that sweetheart regimes for railway workers and other state employees – subsidised by all the rest – must be phased out by 2025. The SNCF, the state-owned  railways, and the RATP, the Paris Metro and bus system, operate ten of the 42 different “state” pension régimes.

It is also reasonable that final-salary related pensions for high-paid executives and civil servants should be scaled back. The corresponding boost of “petits” pensions for farmers and other self-employed workers is long overdue.

Militant unions and public sector unions portray the changes as an attack on the public service. They believe that the end of the shares-for-all system is unFrench and capitalistic.

Macron sees the changes as part of his drive to correct one of the most serious but rarely mentioned structural problems in the French economy – a relatively small working population.

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Union bosses including Yves Veyrier have promised action against the reforms. Photo: AFP

French workers are individually productive but there are few of them. High youth unemployment, lengthy third-level studies and early retirement mean that wealth creation falls on a relatively small number of French people.

According to Eurostat, 64.2 percent of the 15 to 64 age group had a job in France in 2016, compared to 74.7 percent in Germany. The economist Emmanuel Lechypre pointed out this week that individual French people worked very hard but that France, as a whole, worked fewer hours than any other EU country.

Early retirement is only one explanation of this phenomenon but later retirement is essential to stop it from growing worse. As people live longer (good) the “active” part of the population will shrink (bad) unless people work longer.

The moderate CFDT trades union federation has spoken broadly in favour of the proposed reforms. So have the employers’ federation, MEDEF.

The two largest militant union federations, the CGT and FO, have called for nationwide demonstrations next week and the week afterwards – but have failed to agree on one date or a united programme of strikes or other action.

“If we have to strike, we will,” said Yves Veyrier, head of Force Ouvrière (FO). “The mood of members is exactly as it was in 1995.”

The government’s fear is that prolonged and bad-tempered pension protests could combine with other grievances and disputes – notably strikes in hospital emergency departments and free trade protests by farmers – to produce a mood of deep social unrest this autumn and early winter. 

My best guess…

There will be a rocky few weeks. The Gilets Jaunes and the Black Blocs will, briefly, resurrect themselves. But this is not a replay of 1995.

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OPINION AND ANALYSIS

OPINION: Why Germans’ famed efficiency makes the country less efficient

Germans are famous for their love of efficiency - and impatience that comes with it. But this desire for getting things done as quickly as possible can backfire, whether at the supermarket or in national politics, writes Brian Melican.

Published: 24 May 2023 10:38 CEST
OPINION: Why Germans' famed efficiency makes the country less efficient

A story about a new wave of “check-outs for chatting” caught my eye recently. In a country whose no-nonsense, “Move it or lose it, lady!” approach to supermarket till-staffing can reduce the uninitiated to tears, the idea of introducing a slow lane with a cashier who won’t sigh aggressively or bark at you for trying to strike up conversation is somewhere between quietly subversive and positively revolutionary – and got me thinking.

Why is it that German supermarket check-outs are so hectic in the first place?

READ ALSO: German supermarkets fight loneliness with slower check outs for chatting

If you talk to people here about it – other Germans, long-term foreign residents, and keen observers on shorter visits – you’ll hear a few theories.

One is that Germans tend to shop daily on the way home from work, and so place a higher premium on brisk service than countries where a weekly shop is more common; and it is indeed a well-researched fact that German supermarket shopping patterns are higher-frequency than in many comparable countries.

Bavarian supermarket

A sign at a now-famous supermarket in Bavaria advertises a special counter saying “Here you can have a chat”. Photo: picture alliance/dpa | Karl-Josef Hildenbrand

Another theory is that, in many parts of the country (such as Bavaria), supermarket opening hours are so short that there is no other way for everyone to get their shopping done than to keep things ticking along at a good old clip.

The most simple (and immediately plausible) explanation, of course, is that supermarkets like to keep both staffing and queuing to a minimum: short-staffing means lower costs, while shorter queues make for fewer abandoned trolleys.

German love of efficiency

Those in the know say that most store chains do indeed set average numbers of articles per minute which their cashiers are required to scan – and that this number is higher at certain discounters notorious for their hard-nosed attitude.

Beyond businesses’ penny-pinching, fast-lane tills are a demonstration of the broader German love of efficiency: after all, customers wouldn’t put up with being given the bum’s rush if there weren’t a cultural premium placed on smooth and speedy operations.

Then again, as many observers not yet blind to the oddness of Germany’s daily ‘Supermarket Sweep’ immediately notice, the race to get purchases over the till at the highest possible rate is wholly counter-productive: once scanned, the items pile up faster than even the best-organised couple can stow away, leaving an embarrassing, sweat-inducing lull – and then, while people in the queue roll their eyes and huff, a race to pay (usually in cash, natch’).

In a way, it’s similar to Germany’s famed autobahns, on which there is theoretically no speed limit and on which some drivers do indeed race ahead – into traffic jams often caused by excessive velocity.

Yes, it is a classic case of more haste, less speed. We think we’re doing something faster, but actually our impatience is proving counterproductive.

German impatience

This is, in my view, the crux of the issue: Germans are a hasty bunch. Indeed, research shows that we have less patience than comparable European populations – especially in retail situations. Yes, impatience is one of our defining national characteristics – and, as I pointed out during last summer’s rail meltdown, it is one of our enduring national tragedies that we are at once impatient and badly organised.

As well as at the tills and on the roads, you can observe German impatience in any queue (which we try to jump) and generally any other situation in which we are expected to wait.

Think back to early 2021, for instance, when the three-month UK-EU vaccine gap caused something approaching a national breakdown here, and the Health Minister was pressured into buying extra doses outside of the European framework.

This infuriated our neighbours and deprived developing countries of much-needed jabs – which, predictably, ended up arriving after the scheduled ones, leaving us with a glut of vaccines which, that very autumn, had to be destroyed.

A health worker prepares a syringe with the Comirnaty Covid-19 vaccine by Biontech-Pfizer. Photo: John MACDOUGALL / AFP

Now, you can see the same phenomenon with heating legislation: frustrated by the slow pace of change, Minister for Energy and the Economy Robert Habeck intended to force property owners to switch their heating systems to low-carbon alternatives within the next few years.

The fact that the supply of said alternatives is nowhere near sufficient – and that there are too few heating engineers to fit them – got lost in the haste…

The positive side of impatience

This example does, however, reveal one strongly positive side of our national impatience: if well- directed, it can create a sense of urgency about tackling thorny issues. Habeck is wrong to force the switch on an arbitrary timescale – but he is right to try and get things moving.

In most advanced economies, buildings are responsible for anything up to 40 percent of carbon emissions and, while major industrials have actually been cutting their CO2 output for decades now, the built environment has hardly seen any real improvements.

Ideally, a sensible compromise will be reached which sets out an ambitious direction of travel – and gets companies to start expanding capacity accordingly, upping output and increasing the number of systems which can be replaced later down the line. Less haste now, more speed later.

The same is true of our defence policy, which – after several directionless decades – is now being remodelled with impressive single-mindedness by a visibly impatient Boris Pistorius.

As for the check-outs for chatting, I’m not sure they’ll catch on. However counterproductive speed at the till may be, I just don’t see a large number of us being happy to sacrifice the illusion of rapidity so that a lonely old biddy can have a chinwag. Not that we are the heartless automatons that makes us sound like: Germany is actually a very chatty country.

It’s just that there’s a time and a place for it: at the weekly farmer’s markets, for instance, or at the bus stop. The latter is the ideal place to get Germans talking, by the way: just start with “About bloody time the bus got here, eh?” So langsam könnte der Bus ja kommen, wie ich finde…

READ ALSO: 7 places where you can actually make small talk with Germans

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