France’s powerful trade unions are calling on their members to demonstrate in the streets today (Thursday 25) in protest at proposals by employer groups (le patronat) and the federation of French companies MEDEF to abolish the current retirement age of 60.
At the end of December, France’s employer associations led by MEDEF proposed to increase to 45 years the duration of contributions necessary in the private sector before a pension could be realised.
MEDEF called for the increase to combat projected budget deficits in the pensions regime due to increasing life expectancy rates, announcing that it wished to see a progressive rise in the retirement age from 60.
Dismissing MEDEF’s proposals, French unions countered with proposals on early retirement that the employers federations in turn shunned.
“ There doesn’t appear to be a great desire for negotiation between the two parties, “ says Arnauld D’Yvoire of the Paris based Observatoire des Retraites.
“ There is a lot of political motivation behind this, and even some in the unions who believe the current situation should continue have difficulties in saying that we can continue to reform the private sector without touching the public sector, “ he adds.
As a result of the political impasse French employers last week suspended payments to ASF (Association pour la structure financière) – a joint organisation set up by the social partners to fund the cost of early retirement in the country’s Arrco and Agirc pension regimes.
The over-funded ASF had been put forward as a solution to the rebalancing of the deficit in the Agirc pensions regime, which covers France’s cadres (middle management).
However, MEDEF has announced that such a proposal should only go hand in hand with the increase in retirement age.
D’Yvoire notes: “ MEDEF is now taking an aggressive stance saying that if the unions will not adopt the raising of retirement from 60 then there is nothing left to negotiate.
“ What they do not want to see are contribution rises, which they say will lead to increased salaries and a loss of competitivity by French industry.
“ The union position is that if growth in France continues as it is at the moment then there should be no problem with Arrco/Agirc or ASF.”
He notes that the situation is being intensified in France by the fact that there may be a wave of early retirements should the pensions age be raised - as employees rush to make sure their pension rights are not diluted.