French fury

Published : Nov 19, 2010 00:00 IST

There is anger in France over Nicolas Sarkozy's move to push up the retirement age by two years.

in Paris

IN France, both Houses of Parliament have passed the controversial Bill on pension reform and, in a month's time, when President Nicolas Sarkozy will have promulgated it, it will become law. Henceforth the French will have to retire not at 60, as is at present the case, but at 62, and in some cases even 67, in order to get a full pension.

The right-wing President's plans to raise the retirement age have unleashed unprecedented passions and anger, and there have been regular strikes and mass demonstrations since the new school year began in September. The protests have been so widespread that on several occasions, as many as three million people, or 20 per cent of the country's population, have been out in the streets, demonstrating.

And the protests have not died down, now that the Bill is poised to become law. Even though the numbers have begun to dwindle, the anger and frustration remain, and unions have said the protests will continue, the aim now being the ouster of President Sarkozy in the elections to be held in May 2012. The opposition Socialists have promised they will repeal the law raising the retirement age should they come to power.

Just because an unjust proposal has become law because the ruling right-wing coalition has an absolute majority in the Lower House and a substantial majority in the Senate does not mean we have to accept it. It is our duty to protect the population and roll back moves that are unjust, that penalise the poorest of the poor, said Jean-Claude Mailly, president of the Force Ouvriere (Workers' Strength) trade union.

Members of the ruling majority pooh-pooh such threats. Oh, these demonstrations and threats are just the final thrashing of the tail, the death throes before the protests die out. I am not worried for Nicolas Sarkozy. He is a fine and courageous politician and he knows what he is doing. And what he is doing is both right and just. The French will end up accepting the changes because, in the final analysis, they are pragmatic and sensible. In this country people believe they are exceptional and special. The French have been spoilt rotten by a very generous welfare system instituted during the post-War years when we achieved phenomenal growth rates and tasted wealth and development. But the past 20 years have seen a slide back. The financial crisis, the indebtedness of the state, globalisation, and mass unemployment are now obliging us to get off our perch in the skies and face reality. And a section of the French public stubbornly refuses to do so, said right-wing Member of Parliament Georges Tron, junior Minister for Public Sector Services.

Economists say it had become urgent and imperative to raise the retirement age. The hole in the public pension system has been created by the fact that France has an ageing population, resulting in a situation where there are more pensioners than active workers who pay into the pension fund. If untackled, the present system is expected to ratchet up losses of 50 billion by 2020. In 1945, when the system was introduced, there were roughly four workers for each retiree in France; today the ratio has shrunk to 1.5 workers per retiree.

Two factors have upset this balance: the fact that longevity has increased women now expect to live up to 87, while male life expectancy is 85 coupled with a simultaneous drop in the birth rate. Statistics released recently indicate that any child born today in France will probably live up to a hundred because of the very high standard of living sanitation, diet, medical care. By 2050 there will be some 200,000 citizens over the age of 100, while at least half the French population will be older than 60.

The age pyramid in the developed world has been inverted with old people far outnumbering the young. At the same time, technological advance has meant that in many industries men have been replaced by machines, leading to persistently high rates of unemployment, which place an additional burden on state-funded unemployment benefit schemes.

In Germany the retirement age is 67; in Britain it is 65 and is likely to go up to 67. Our European neighbours have realised that we have to change this pay as you go' system if we want to save it. France is one of the last developed countries in the world to want to maintain retirement at 60, but that is just not possible. The arithmetic no longer works. It's as simple as that. In France retirees can hope to lead healthy lives for at least two decades after they stop working. So it is logical to work a couple of years more, the economist Olivier Pastre told Frontline.

There has been widespread criticism that the Left in France the trade unions and the opposition Socialists, Communists and Greens is opposed to any reform. Not true, they riposte. They are not opposed to reform per se. We are opposed to Mr Sarkozy's specific proposals because they are unjust. We understand that because of changing demographics the system has to be changed, adapted, and we accept that. What we reject is this particular reform. The government is adamant about raising the retirement age. But other solutions can be found. Mr Sarkozy has consistently given tax breaks to his rich friends and business supporters. We can look at other means of financing. This proposal is unjust because it penalises two categories of workers who find themselves on the lowest rung of the ladder manual workers and women, said Francois Chereque, the leader of the CFDT, one of France's eight major trade unions.

Students, too, have been part of the protests. A student leader, when asked why he was protesting against pension reform when he had not yet entered the job market, replied: Already the unemployment rates for young people are very high, almost double the national average of 11 per cent. If you extend the working life of the older generation it means we will have to wait longer to find a job since both industry and the government appear incapable of job creation. The job market is shrinking, not expanding. So why are you favouring the old at the expense of the young?

Sociologists like Anne-Marie Guillemard say the problem in France lies elsewhere, and raising the retirement age will only shift the burden off the pension fund onto other welfare agencies such as the unemployment benefit fund: In France the age at which you actually touch your pension is entirely disconnected to the age at which you leave the workplace. Only 39 per cent of the 55-64 age group is gainfully employed in France as compared to the European average of 48 per cent. Only 17 per cent of the 60-64 age group in France is in active service. In countries like Finland or Holland where the rates are 64 and 84 per cent respectively, senior citizens remain in their jobs much longer and they continue to contribute to the pension fund.

Pushing the retirement age up, Guillemard says, really means pushing up the age at which you start receiving your pension instead of other forms of income. In France we push people out of the workplace at 58 in pre-retirement schemes, when they are forced to go on the dole, simply because the older a worker gets, the more expensive he or she is for the employer, especially because of regular increments written into the contract, she told Frontline.

Employers prefer to get rid of older employees in order to hire youngsters on short-term contracts or as interns, and the starting salaries are much lower than end-of-career salaries. So the majority of those claiming their pension at 60 have already quit the marketplace two years earlier.

What then is the benefit of making them wait another two years? This would make sense if they were in productive jobs, earning money rather than depending on the dole while waiting to get their pension. The government is making us believe that increasing the retirement age will balance the books. It might balance the pension fund but not the overall debt of the state because the enforced inactivity of the 58-62 tranche of the population will have to be paid out from another account, she said.

But the protests in the streets and their sustained duration, have to do with a larger problem. The French today see the future with fear in their eyes. Industrial output has declined sharply with a loss of half a million jobs since 2000. Certain manufacturing industries have seen a sharp fall and even in traditionally French sectors like fashion, couture or lingerie, French industrialists have decided to relocate in cheaper countries such as Tunisia or Morocco where labour costs are a third of what they are in France.

Socio-psychologist Nadine Kaufmann said: And yet this government continues to ignore the needs of the poorer sections of the population. It has no feasible plans to retrain the older generation or to give better professional training to our youngsters. The job market is saturated with persons with university degrees but no specific skills. And then this government has truly angered people by its insouciance and arrogance. Mr Sarkozy knows that he has lost some of the support of the centrists who are disenchanted with his style at once monarchic and rude, his appeals to the baser sentiments the debate on national identity was clearly a siren call to the extreme Right with fingers being pointed at immigrants, particularly Muslims. Then there have been the scandals that have rocked the government, the conflict of interest involving the present Labour Minister Eric Woerth, who for a long time was also the treasurer of the ruling UMP party and as such cosying up to the super rich.

Mr Sarkozy has tried to secure his extreme right-wing base and strengthen his popularity with old people by waving the insecurity flag. The mass expulsions of the Roma is a case in point. Not all Roma are thieves or delinquents. The French are ashamed of a President who is capable of stooping so low because most French people have a certain idea of France as a country that is just and fair, where human rights are respected. Most people lay great store by the image of France in the world, and the expulsion of the Roma greatly dented that image. The grand debate he held on National Identity spoke directly to the extreme Right and ended up polarising the population in a manner which is not healthy. These are difficult times for France and perhaps Mr Sarkozy is not the right person for this country for he tears the fabric of society apart instead of creating national unity and harmony.

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