GP Short Notes

GP Short Notes # 673, 16 April 2023

France: Contended pension reform bill becomes law
Padmashree Anandhan

France: Contended pension reform bill becomes law
Padmashree Anandhan
What happened?
On 14 April, the Constitutional Court, upon review of the bill struck down six measures part of the legislation and approved the fundamental rules of the reform. While the opposition's referendum to retain the retirement age to 62 was rejected. France's trade unions released a joint statement to Macron: "Given the massive [public] rejection of this reform, the union's request him solemnly to not promulgate this law, the only way to calm the anger which is being expressed in the country."

On 15 April, France's President Emmanuel Macron signed the pension reform bill into law. A key element was the extension of the age limit to 64 was amended into the social security code. He said: "The country must continue to move forward, work, and face the challenges that await us." After the approval, France's Constitutional Council, Prime Minister Elisabeth Borne said: "…judged the reform, on the substance as well as procedure, to conform with the constitution." The French government released a statement: "With this reform, the finances of the pensions system will be balanced in 2030. The government now wants to continue talks with [trade unions and other actors] to make work meaningful, improve working conditions and reach full employment."

In response, the opposition leader Jean-Luc Mélenchon said: "The Constitutional Council's decision shows that it is more attentive to the needs of the presidential monarchy than to those of the sovereign people." The leader of the National Rally, Marine Le Pen said: "The political fate of the pension reform is not sealed."

To control the protests and outbursts after the bill was passed, barriers and police were deployed ahead. One of the young protestor's names Lucas aged 27 said: "Making this reform is really short-sighted to me, and it brings up other questions like what are [the president's] priorities?"

What is the background?
First, the failed protests and no-confidence motions. The protests over the pension reform bill proposed by France's President Emmanuel Macron began on 19 January among the French and the opposition parties. Despite months of widespread objection against the bill and violent clashes, the government went ahead to use Article 49:3 to pass the bill without a vote. This triggered two no-confidence motions, the first which was held by left-wing parties, which failed, and on 20 March, the second motion put forward by far-right party leader Marine Le Pen which did not succeed either. This led the bill to clear its way for the review and approval of the Constitutional Council.

Second, elements of the reform. The law aims at reforming the retirement model as the balance between the working and pension-receiving population is off. The signing of the law would mean the rise of the retirement age benchmark from 62 to 64, which has been considered the most controversial. Next would be the mandate to work till 43 age to avail full pension. Both the rules target the older population of France. Whereas another rule part of the reform is an increase in pension contributions from 41 to 43 payments in a year. This is expected to add a little more stress on the working-class population, and this has not been received well among the young French. Apart from the major conditions, the law gives an early retirement for those who began working early, removal of metro drivers from the pension plan and aims to increase the minimum pension range from "EUR 100 to EUR 1200 per month."

Third, the power of the Constitutional Council. The council's decision was highly looked upon by the opposition and the trade union because of its core role. It examines whether the proposed bill aligns with France's previous enactment. The council consists of three women and six men, headed by a socialist Prime Minister. Of the nine, many are centrists and conservatives, with two appointed by Macron. Although the composition of the council does matter in a passing decision, a bill has rarely been rejected by the council since 1959. The usage of Article 49.3 is also another gear of the Council. Till now under Borne, the article has been used nearly 10 times to pass budget decisions without a vote in the parliament. This rule out the doubts over policy decisions which arose when Macron lost the parliamentary elections.

What does it mean?
First, no referendum or revocation. The last-minute referendum filed by the opposition to retain the retirement age limit to 62 was rejected, and with the law now passed, it is an even more complex to revoke the reform. The primary step would be to get support from the parliament members would be a task as the no-confidence motions never succeeded. Even though it seemed a grey area, getting 10 per cent of voters into a petition along with Council's approval and completing all the steps in nine months would be very ambitious.

Second, the opposition's reputation is derailed. The reform bill is majorly viewed as a hit to Macron's popularity; however, Macron's popularity is at its lowest. Still, Macron will gain from questions about the opposition party unity. Failure of the no-confidence motion and a rejected referendum at the council and their failure to address the protestors' concerns will reduce the popularity of opposition parties.

Third, a chaotic France. The labour union who plans to continue the protests through May will be speed breakers for everyday operations in France for upcoming months. But the larger issue would be the question over the overall impact of the social model of France. From the older segment of people to the working class to the youth have raised concerns over the path ahead of France, if it is going to tend its policies to ease problems in budget and businesses while ignoring the social model.

Other GP Short Notes

Click below links for year wise archive
2022 | 2021 | 2020 | 2019 | 2018