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Macron’s pension reform muddle | Financial Times


Emmanuel Macron rolled the dice on reforming France’s creaking pension system. His gamble hangs in the balance. Set against a backdrop of protest, where two-thirds of the population are against the president’s plan, his minority government has resorted to sidestepping a parliamentary vote that Macron calculated he would lose. Changes are necessary to plug a pension deficit in a country with an ageing population. But the way Macron has tried to ram through reform leaves the president and France with a democratic deficit.

In triggering a special constitutional power, Macron has bet that his government’s chances of surviving a no-confidence vote that will now follow are greater than were the odds of garnering parliamentary support for his reforms in the normal fashion. The credibility of his second term as president depends on his calculations working out. He must hope that they are more accurate than his assessment that he could count on the conservative Les Républicains to help him.

The probability is that the vote of no confidence scheduled for Monday will fail, and his reforms will therefore pass. But it should not have come to this. Overhauling France’s generous pension system was always going to be fiendishly difficult. Strikes were an inevitability. Macron is also no stranger to the use of the power, known as Article 49.3 that can bypass parliamentary votes: his government has used it 10 times before. But the degree of unease across the country over the plans, already watered down but which detractors allege are unfair to blue-collar workers, shows that Macron underestimated the scale of his opposition. Millions have felt the need to protest since January. Industrial action has left 10,000 tonnes of rubbish to pile up on Paris streets and has cut production at nuclear reactors.

Macron failed to convince both voters and parliamentarians of the necessity of his vision; something that has been vital since he lost his parliamentary majority last year. His high-handed method of forcing that vision on the country — no matter its merits — now risks turning unease into unrest, potentially on the scale of the 2018 gilets jaunes protests that blighted his first term.

Macron is correct that France needs to overhaul its pay-as-you-go pension system and that more people need to work to help fund public services. France’s pensioners are expected to increase from 16mn to 21mn by 2050. Meanwhile, its accumulated public debt stands at over 113 per cent of gross domestic product. The president’s reforms will raise the minimum retirement age from 62 to 64, bringing it more in line with its EU neighbours, and will require 43 years of work to qualify for a full pension.

Yet Macron’s method of pushing a sound policy through makes little political sense. Having won the necessary votes in the Senate last week, he should have let the bill go to a vote in the National Assembly. A failed vote would have signalled that he needed to reassess and redesign his overhaul.

In the short term, the future of his prime minister, Élisabeth Borne, is uncertain. But there are wider questions for the longer term. Les Républicains have long supported and campaigned for pension reform. If Macron could not count on them for a majority, even after substantial compromises, what hope can there be for other ambitions for the remainder of his presidency until 2027? Not much. And this imperils his wider legacy, which has otherwise made France more competitive. Macron pledged a more consensual, less top-down style of French politics. By trying to force through his reforms, he is ultimately weakened.



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