EOnce again – the eighth since the early 1990s – France is on fire over pensions. Once again, it is difficult to distinguish real controversies from accepted postures. And once again, the reform has little chance of restoring the confidence of the French in their pension system. The debate first crystallizes on the financial necessity of a reform. It opposes the unions and the left, for which the sustainability of pensions is not in question, and the government, according to which there is on the contrary an urgency to straighten out a system today in danger.
This controversy encloses the discussion in too narrow a perspective, because it ignores that France is today confronted with a marked tightening of its budgetary equation. We must simultaneously invest in education, health, ecological transition, reindustrialization and defence, to name only the major priorities. This need to increase public spending is not unique to our country, but it is more acute there than among our main neighbours.
However, if they are not zero, our leeway for financing through debt, taxes or the redeployment of expenditure is too narrow to meet needs. This is the central economic problem of this five-year term and it will also be that of the following ones. The way out is therefore to lower the weight of retirement expenditure in the gross domestic product (GDP), and to do this to increase the employment rate of senior citizens. The leeway on this lever is real: the proportion of 55-64 year olds in employment is certainly on the rise (56% in 2021 against 31% in 2000), but remains significantly lower than that observed in Sweden (77%) or Germany (72%). Increasing participation in the labor market must therefore be the cornerstone of our economic strategy.
Withdrawal of ambitions
This obviously does not imply distracting from the contributions currently intended for the financing of pensions. But this allows, at a constant sampling rate, to create room for manoeuvre. The government knows this very well: Gabriel Attal, the Minister of Public Accounts, has estimated the additional revenue expected from the reform by 2030 at 12 billion (The JDD, January 8, 2023). But he does not assume politically that this is, at least as much as balancing the accounts, one of the main motivations for the reform.
What is then striking is the decline in the ambitions of the executive. Yesterday he wanted to change the rules of the game and build a universal system; today, it limits itself to measures of balance over a horizon of less than ten years. It bears repeating: a pension system cannot eliminate uncertainty, but it must aim to reduce it as much as possible. New entrants to the labor market must have as much visibility as possible on the age at which they will leave it and on the pension they will receive. This is what will allow them to make informed choices about, for example, savings or training.
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