Why does Emmanuel Macron insist on the need for pension reform?

“An obsession with reform beyond crises”

Rafael Cosprofessor of political science at the University of Bordeaux.

“It is surprising that the pension reform is so first on the Elysian agenda. On the one hand, because the beginning of the school year is particularly busy, on the other hand, because the subject of pensions is the more mobilizing on the road and Emmanuel Macron therefore embarks on a very expensive social and political reform, even if he no longer has the docile majority he had in the past.

Three series of factors allow us to understand the centrality of this reform in the five-year period that is about to begin. First, political considerations. Emmanuel Macron needs to regain a place in an agenda that he has suffered until now. Politically, this reform is also one of the points on the occasion of which Macronism will negotiate its partner-rival relationship with the right, neutralizing part of its opposition capacity.

The second series of reasons has to do with macronism, which was built on its ability to maintain, despite exogenous shocks, a classic neoliberal agenda, of which pension reform is a must. It must be remembered that in February 2020, the government had sought to impose procedure 49-3 during the first Council of Ministers dedicated to Covid-19. And at the end of the crisis, the reform was described as“empire” in the recovery plan presented to the European Commission. Despite the adversity, pension reform never went away, and a form of obsession with reform continued to be observed beyond the crises.

Finally, the third key explanation, in my opinion the most fundamental, is that a pension reform is primarily a reform aimed at financial markets. To highlight this aspect, we must keep in mind the precedent of 2010. As soon as the crisis of 2008 came out, the direction of the Treasury had told Nicolas Sarkozy that the pensions had to be reformed. What was done in 2010, despite the very significant hostility. It was about organizing the sustainability of the debt, smoothing public spending in the long term without making the budget tight in the short term.

I have the impression to review today this association between a crisis and a pension reform that is very expensive socially, but which reassures the markets. The key argument in favor of the reform is no longer the balance of the system but the general question of public spending control. This problem explodes with the increase of key rates of the ECB, which means that Bercy no longer excludes, I think, the possible return of a debt crisis.

Moreover, regardless of its technical content, what makes the pension reform particularly salient is that it is the one that most vividly shows the balance of power between the streets, power and finance. »

“The president wants to put France back to work”

Michael Zemmourlecturer at the University of Paris 1 Panthéon-Sorbonne and co-director of the axis of socio-fiscal policies of the Interdisciplinary Laboratory for the Evaluation of Public Policies (LIEPP).

“It is interesting to see that the reasons proposed by the government to reform pensions are no longer the same as they were ten or twenty years ago. Despite sometimes unnecessarily alarmist talk about the deficit, there is no longer any real concern about the financial situation of the pension system.

With the latest reforms undertaken, and the planned savings – gradual increase in the contribution period, and the downward trend of pensions – the system is no longer structurally in deficit. It is also estimated that the share of pension expenses in GDP will gradually decrease, although there will be more pensioners.

In reality, the real reason that pushes the president to act is now based on the dynamics of the labor market: by increasing the retirement age, he bets on increasing the number of elderly people at work, and therefore the ability to production of the country. At a time when business leaders are complaining of serious recruitment difficulties, it is about reducing tensions in the labor market, bringing into play more competition between workers.

In this sense, the pension reform embodies exactly the same philosophy as the unemployment insurance: the French have to work more, even if they want to do it in more degraded conditions. But with the difficulties of access to employment for the elderly, the gain of the reform remains to be proven.

Behind the pension reform, there is also the idea of ​​giving guarantees to Brussels by reducing public spending in general. But contrary to what you might think, there is no pressure from the European Commission to reform pensions in particular. What the Commission wants is a reduction of the public deficit to 3% by 2027. In any case, it is really the government that has committed, through the budget stability pact, to reform pensions to achieve this.

When at the same time it lowers production rates – which widens the deficit – we can say that its choice is eminently political. To finance the tax cuts, the president, who considers that retirement pensions are too high compared to the duration of workers’ contributions, wants to put France back to work.

Be that as it may, the savings made – about 10 billion euros for 2027 – must also be put into perspective. Because by bringing back the retirement age, other social costs have increased. It is so estimated that for one euro of unpaid pension, we must count between 25 and 50 cents of social benefits: unemployment compensation, RSA, disability pension or sickness allowance. »

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