# French PM to unveil pension reform in big test for Macron Author: Pal Sinha, Barnali Author URL: https://financedigest.com/author/pal-sinha-barnali Published: 2023-01-10 Category: NEWS Category URL: https://financedigest.com/category/news Meta Title: French Pension Reform: Key Details and Challenges Meta Description: Get the latest on France's pension reform plan, the potential age increase to 64, and the impact on unions and voters. Stay informed with our updates. URL: https://financedigest.com/french-pm-to-unveil-pension-reform-in-big-test-for-macronhtml ![undefined](https://prod.superblogcdn.com/site_cuid_cm5qst7v3003gwirgwqtxn8i8/images/2023-01-10t080653z2lynxmpej0900ortroptp4france-reform-pension-1736814600856-compressed.jpg) By Caroline Pailliez and Leigh Thomas PARIS (Reuters) – French Prime Minister Elisabeth Borne on Tuesday will unveil the details of a pension reform that is already angering unions and a large majority of voters and will be a key test of President Emmanuel Macron’s ability to implement change. One thing is clear: The French will have to work longer than they do now. The most likely [scenario would see the government](https://www.financedigest.com/factbox-possible-scenarios-as-italys-government-faces-collapse.html "Factbox-Possible scenarios as Italy’s government faces collapse") raising the retirement age to 64 from 62 currently. Macron [initially banked](https://www.financedigest.com/redwood-bank-launches-four-months-after-securing-its-initial-banking-licence.html "Redwood Bank launches four months after securing its initial banking licence") on 65, but giving up one year will make it easier to get the reform adopted in parliament. What is also certain: The government is heading for a clash with labour unions. All of them, including the moderate, reform-minded CFDT have said they reject increasing the retirement age. For them 64 or 65 doesn’t matter much. Either is a no-go. But the age [target is key](https://www.financedigest.com/japans-inflation-stays-above-bojs-target-key-gauge-hits-four-decade-high.html "Japan’s inflation stays above BOJ’s target, key gauge hits four-decade high") for another group — the conservative Les Republicains (LR). How its lawmakers vote will make or break the reform in parliament, where Macron lost his outright majority [last year](https://www.financedigest.com/over-50-of-businesses-increased-their-cyber-security-budget-last-year-amid-attacks.html "Over 50% of businesses increased their cyber security budget last year amid attacks"). LR may have lost a lot of MPs in last year’s election, but their MPs, plus some centre-right allies, added to Macron’s centrist group, would be [enough to push](https://www.financedigest.com/solvency-ii-pushing-existing-systems-and-processes-harder-is-not-enough-for-compliance.html "Solvency II: pushing existing systems and processes harder is not enough for compliance") the reform through. And LR’s new chief Eric Ciotti said he would back the reform – if his conditions are met, including [increasing the retirement age to 64 rather than 65 and bumping up the minimum](https://www.financedigest.com/greece-to-increase-minimum-wage-again-before-election.html "Greece to increase minimum wage again, before election") pension for all, rather than only for new retirees. Not all in his party agree, however, so there is still some uncertainty. But at this stage it seems the [biggest challenge](https://www.financedigest.com/institutional-investors-to-increase-commercial-real-estate-allocation-but-brexit-is-biggest-challenge.html "Institutional investors to increase commercial real estate allocation but Brexit is biggest challenge") will be in the streets. It’s unclear whether the unions can gather enough people, angry not only with the [pension reform](https://www.financedigest.com/factbox-whats-next-for-frances-pension-reform.html "Factbox-What’s next for France’s pension reform?") but also with issues including a cost-of-living crisis, to derail Macron’s plans. PROTESTS Pension reform in France, where the right to retire on a full pension at 62 is deeply cherished, is always a highly sensitive issue and even more so now with social discontent mounting over the [cost of living](https://www.financedigest.com/estonias-pro-kyiv-government-faces-election-test-amid-cost-of-living-crisis.html "Estonia’s pro-Kyiv government faces election test amid cost of living crisis"). With currently one of the lowest retirement ages in the industrialised world, France spends more than most other countries on pensions at nearly 14% of economic output, [according to the Organisation for Economic](https://www.financedigest.com/worst-flooding-since-1998-leaves-33bn-economic-toll-in-china-according-to-aon-catastrophe-report.html "Worst flooding since 1998 leaves bn economic toll in China, according to Aon catastrophe report") Cooperation and Development. But polls show pension reform is unpopular. Only 27% of [voters agree with increasing the retirement age – most of whom back 64 and not 65 – an Elabe poll](https://www.financedigest.com/german-voters-deliver-mixed-verdict-on-scholz-coalition-in-regional-poll.html "German voters deliver mixed verdict on Scholz coalition in regional poll") for BFM TV showed last week. Some 47% want no change to the retirement age and 25% want retirement to be earlier than now. [Macron had to put his first pension reform](https://www.financedigest.com/macron-warns-of-more-healthcare-woes-as-he-flags-reforms.html "Macron warns of more healthcare woes as he flags reforms") bid on ice in 2020 as the government rushed to contain the COVID outbreak and save the economy. Now, although recent [strike action](https://www.financedigest.com/britain-braces-for-winter-of-strike-action-as-nurses-walk-out.html "Britain braces for winter of strike action as nurses walk out") has been limited to specific sectors, such as refineries and airlines, outrage over pension reform could easily spark broader protests. But government spokesman Olivier Veran said: “We’re not reforming [pensions to be popular but to be responsible](https://www.financedigest.com/pension-life-slams-government-and-regulator-in-its-response-to-scam-consultation.html "Pension Life slams government and regulator in its response to scam consultation"). We’ll go all the [way because it’s the only way our social](https://www.financedigest.com/social-trading-is-the-new-way-that-gen-z-are-getting-their-share-of-the-pie.html "Social Trading is The New Way That Gen Z Are Getting Their Share of The Pie") model can survive. (Reporting by Elizabeth Pineau, Leigh Thomas, Caroline Pailliez; writing by Ingrid Melander, Editing by William Maclean) --- This blog is powered by Superblog. Visit https://superblog.ai to know more. ---