FILE PHOTOT: French Prime Minister Edouard Philippe speaks during the questions to the government session at the National Assembly in Paris, France, January 7, 2020. REUTERS/Charles Platiau
January 11, 2020
PARIS (Reuters) – French Prime Minister Edouard Philippe on Saturday offered a major concession to unions contesting his government’s overhaul of the pension system, in a move aimed at ending strikes which are now in their fifth week.
Philippe said in a letter to unions and employers that he was prepared to withdraw plans to raise the retirement age for full pension benefits by two years to 64 if certain conditions were met.
“The compromise that I’m offering … seems to me the best way to peacefully reform our retirement system,” Philippe said in a copy of the letter obtained by Reuters.
He made the concession after talks between the government and trade unions to break the deadlock failed on Friday. The CFDT union, France’s biggest and inclined to accept a limited reform, welcomed the move, saying in a statement that it showed “the government’s will to find a compromise”.
The concession comes as tens of thousands of demonstrators marched through eastern Paris against the reform, which aims to replace France’s myriad sector-specific pension schemes with a single points-based scheme.
The protest turned violent on its fringes with police firing tear gas and charging groups smashing windows and lighting rubbish bins and billboards on fire.
The government’s standoff with the unions is the biggest challenge yet of President Emmanuel Macron’s will to reform the euro zone’s second-biggest economy.
Philippe’s government had hoped to create incentives to make people work longer, notably by raising the age at which a person could draw a full pension to 64 while maintaining the legal retirement age at 62.
While supporting the principle of creating a points-based system, the CFDT was opposed to raising the age for full benefits. Hard-left unions want the reform to be dropped altogether.
The government has argued that the pension reform, which would be the biggest since World War II, would make the system fairer while also putting it on a more sound financial footing.
With one of the lowest retirement ages among industrialized nations, France currently spends the equivalent of 14% of economic output on pensions.
Philippe aims to present the reform bill on Jan. 24 so that it can be discussed in parliament starting in mid February with the aim of passing a law before the summer break.
He said in the letter he expected unions and employers to agree on how to ensure the long-term financing of the pensions system in April.
If they failed to agree, the government would pass decrees guaranteeing the pension system is in the black by 2027, he said.
(Reporting by Caroline Paillez, Noemie Olive, Pascale Antonie and Ardee Napolitano; writing by Leigh Thomas; editing by Alexander Smith, Mike Harrison and Clelia Oziel)
