Business & Economy

France must review pension system by 2017

19 December, 2012

President Francois Hollande must review France's pension system during his current 5-year mandate as a previous reform that drew mass street protests did not go far enough, Finance Minister Pierre Moscovici said on Wednesday.

Asked if France needed a new pension reform by 2017, he told RTL radio: "It seems to me that we will have to return to this subject ... There will no doubt be a retirement (reform) but it will have to be fair."

In 2010, conservative former president Nicolas Sarkozy launched a reform of the pension system which raised the legal pensionable age by two years to 62, prompting weeks of protests across the country.

Hollande's Socialist government has since revised the reform to allow people who started working before the age of 20 to retire at 60 and to ease conditions for access to full pensions for mothers of three children or more.

But Moscovici said the 2010 reform put in place by Sarkozy's former prime minister Francois Fillon had not gone far enough.

He cited a government-commissioned report, leaked this week by Le Monde daily and due to be published on Wednesday, which said that the pension system's deficit would reach 18.8 billion euros ($24.8 billion) in 2017, versus 14 billion in 2011.

Moscovici avoided using the word 'reform'. But he said the government would launch consultations in the first half of 2013 to address the funding shortfall in a way that does not penalise poor workers or those in physically strenuous jobs.

Sarkozy's overhaul of the pension system came at a steep political cost, as trade unions staged protests which drew millions into the streets of French cities and oil refinery workers blockaded their facilities for weeks.

France's main employers association Medef has called for the retirement age to be raised to 63 and for a rule stipulating that workers must pay contributions for at least 43 years to be awarded the full pension. It is opposed to any raise in the actual amount of contributions, either for firms or workers.