World News: France Grapples with Pension Reform Retirement

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Category: World News - Europe

Published on Sunday, 29 January 2023 07:50

Written by Olivier Longhi

French citizens take to the street as a new day of demonstrations against the Government's pension reform project looms, an analysis of social and economic realities is needed in a logic of long-term anticipation. Explanations.

We're going to have to get used to it. Pension reforms are like global climate change: inevitable. More concretely, the plan presented by the French Government, which continues to provoke the ire of the country with regard to the flagship proposal of the project which is to postpone the legal age starting at age 64, does not project beyond 2030.

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This shows how the proximity of this date is particularly revealing of several realities that will have to be accepted in the years to come at the risk of reviving regularly. the debate on the issue and to lead to umpteenth reforms. First of all, the first reality is that the demographic weakness of the France, which is not the only one in this case, weighs heavily on the future of pension systems. The insufficient renewal of generations (1.8 children per woman) does not allow us to rely on them to hope to save a pay-as-you-go system that suffers more in addition.

Scenario or Observation

Secondly, it will be necessary, and as soon as possible, and without being obsessed with inflation that will eventually abate, to accept a significant increase in wages and salaries that will allow , the last point, to increase contributions. But this scenario, which is more of an observation and prospective, is part of a logic of maintaining the distribution system which is based on the contributions of the assets for the benefit of the retirees.

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Another reality to which it may be necessary to convert, long erected as a taboo, is to encourage pensioners to participate in the overall effort. But to what extent and how much? Who will be eligible for an exemption in view of the low level of certain pensions? How to bring public opinion to such a decision which will take a fresh look at retirement and   retirement by making them assets in fact indirect?

This is no longer a simple question of financing but of societal choice because it would force all current assets to question the notion of the same Retirement which essentially smells a form of marginalization of working life. So many solutions that have been accepted, or that may one day be, and that flourish with each debate on pensions.

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Taboo of Capitalization

Another option would also be to think that the France no longer necessarily has the means to finance the pensions  it allocates to date. But, and rightly so, some will cry injustice arguing that if the elders have benefited from the system, the current assets are entitled to it.

An endless debate with tautological accents that pushes to advance the last great taboo in this area, the pension by capitalization. Hated for its unequal aspect because it is based on the ability of the unemployed to build up capital throughout his life via various banking or stock exchange products, the idea of a retirement by   However, capitalization could resurface in the coming years.

Not necessarily in its most liberal version, but the result of an amalgam to be studied between pay-as-you-go and capitalization. And in view of the projections proposed by the Pensions Advisory Council (which forecasts a deficit of the scheme in only one case out of four), all the solutions deserve to be studied because in the end What matters above all is that everyone can live their retirement and end of life in financial peace and dignity.

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Bio: Olivier Longhi has extensive experience in European history. A seasoned journalist with fifteen years of experience, he is currently professor of history and geography in the Toulouse region of France. He has held a variety of publishing positions, including Head of Agency and Chief of Publishing. A journalist, recognized blogger, editor, and editorial project manager, he has trained and managed editorial teams, worked as a journalist for various local radio stations, a press and publishing consultant, and a communications consultant.