French Lower House Passes Sarkozy Pension Bill; Senate to Consider Plan
France’s National Assembly approved President Nicolas Sarkozy’s plan to raise the legal retirement age as part of an effort to plug the pension system’s deficit. The bill will next be debated by the Senate, or upper house.
The proposal, cleared by 329 votes to 233 today, lifts the minimum age to 62 from 60 and the age at which full benefits can be obtained to 67 from 65.
Sarkozy, triggering protests and strikes, is aiming to narrow retirement fund losses after promising to curb the government deficit. Failure to change the system would result in a shortfall in the state pension fund of 50 billion euros ($65 billion) annually by 2020, the Budget Ministry estimates.
“This is one of the most important reforms of this parliament and presidency,” Jean-Francois Cope, who leads lawmakers for Sarkozy’s party in the assembly, said today. “It’s about preserving the pension system for our children.”
The pensions battle is far from over. Unions have called for a second day of strikes on Sept. 23 after Sept. 7 protests that disrupted schools, public transport and hospitals. The first round of demonstrations drew between 1.1 million and 2.7 million people, according to police and unions, making them among the biggest in the past two decades.
Martine Aubry, who leads the opposition Socialists, pledged to reverse the retirement age increase if her party wins elections in 2012.
France’s legal retirement age has been 60 since Socialist President Francois Mitterrand cut it from 65 after his 1981 election. Germany decided in 2007 to raise its retirement age gradually to 67 from 65. Spain and Italy have already increased their retirement ages to 65 to address the squeeze of longer life expectancies and declining birth rates.
The premium paid by France to borrow for 10 years relative to Germany has dropped to 34 basis points currently from more than 55 points June 8, when concern peaked about Sarkozy’s readiness to push through reforms and trim the budget deficit.
Rate this Page