(Bloomberg) -- French President Emmanuel Macron is considering fast-track procedures to raise the retirement age, bypassing drawn-out negotiations with labor unions hostile to the change and risking mass protests and divisions among his own supporters.
Rather than overhauling the pension system in a dedicated bill in consultation with business and labor unions, Macron’s government could instead add an amendment to the 2023 budget, Prime Minister Elisabeth Borne said. The budget is due to be presented later Monday for discussion in parliament in October.
“We are looking for the best route to implement this reform by summer 2023 while leaving space for dialog and consultation,” Borne said Monday in an interview on BFMTV and RMC radio.
Using the budget as a vehicle for pension reform would be one of Macron’s biggest political gambles to date. While he won re-election in the spring this year promising to raise the retirement age -- currently at 62 -- method is crucial in a country where unions are traditionally deeply involved in negotiating reforms and have the power to bring huge disruption through strikes.
Taking pension reform to parliament via the budget bill is also a political risk since Macron lost his absolute majority at the National Assembly in June elections. Unless the government gets the backing of some opposition lawmakers for the budget, Borne would likely need to use an article in the constitution, called 49.3, that allows bills to be passed without a vote. The price would be exposing her government to a no-confidence vote.
“My methods are dialog and the search for compromise,” Borne said. “At the same time, I think that the French wouldn’t understand if we were at an impasse. Thus, it’s one of the tools that is at the disposition of the government if we see a situation where we’re blocked,” she said of the possible use of article 49.3.
Several labor leaders and politicians have already warned Macron against such a top-down approach. Laurent Berger, the leader of moderate union CFDT, has said he would walk away from all negotiations with the government, while centrist ally Francois Bayrou has called on the president to take more time to consult in order to avoid uniting political opponents and dividing the country.
Yet moving ahead with the pension reform is a crucial part of Macron’s economic program for his second term. Deficits will balloon in the coming years if nothing is done, the government says, and the potential savings from having French workers pay into the system for longer are already earmarked for spending in other areas.
“We want to do it fast because it is necessary,” Franck Riester, minister for parliamentary relations said Sunday on Radio J. “We want a method that combines consultation and parliamentary debate and that will happen whatever the legislative vehicle, but let’s be careful that consulting and taking the time to talk doesn’t just mean for some a way of avoiding reform or procrastination.”
However Macron goes about a pension reform, he’s likely to face opposition. According to a survey of 1,002 people by Elabe for BFMTV, only 21% of people want to raise the retirement age from 62 currently, and 33% want to reduce it.
©2022 Bloomberg L.P.
BNN Bloomberg Picks
4 reasons for thrift store gifts this year
What the new GDP report might mean for the next Bank of Canada decision
Real estate in 2023: Re/Max forecasts 3.3% decline in home prices
Gas prices in Canada: Analyst not expecting 'dramatic increases'
E3 Lithium gets $27M from feds to support oilfield lithium extraction
TD Bank pauses Canada Post loan program weeks after national expansion