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Pensions 27% of French public service spending

FRANCE - Public service expenses including the payment of pensions absorbed nearly half of the French state budget in 2003.

The expenses of the ‘fonction publique’, or public service, amounted to 121 billion euros last year - 27% of which was spent to pay public employees’ pensions.

This expense - a sum in the region of 30 billion euros – is second only to employee wages, which account for 55% of public sector expenditure.

But it is pensions, rather than wages, cast in the role of “the mother of all expenses” according to financial daily La Tribune.

Resources spent to pay pensions for the public service represent 12% of the total state budget while an estimate of the finance ministry also reveals that expenses connected with public employees have counted for 57% of the state budget increase in the 1992-2002 decade.

Next year, it is estimated that pension expenses for public employees and military personnel will grow two billion euros. The increase is partly due to the indexation of such pensions against prices, as decided in 2003, and the retirement of the post-war generation.

As many as 70,000 workers will be on the pension payroll by 2007, about 20,000 more than the current average.

Gilles Carrez, of the finance committee at the lower chamber of the National Assembly, was reported to have said: “The increase of the influx of retirement will put greater pressure on the pension burden.”

But he added: “It would offer the unique opportunity to reshape the format of public service.” Carrez’s spokesman was not available for comment.

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