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French President Sarkozy discussing pension reform

BBC reports that French President Nicolas Sarkozy is in meetings today with top union and business officials to discuss pension reform. This is part of a bigger debate about work in the country, including working on Sundays, making labor contracts more flexible (easier to hire, easier to fire – according to your view), etc. France has a ballooning deficit and debt and its labor market, although talented, is known for being hampered by red tape. Hopefully government reform will produce some positive results for the future, but it will be quite a battle against special interests who have had it easy from the welfare state for a long time.

French President Nicolas Sarkozy will meet key unions later to discuss controversial plans to reform the country’s pensions system. The government wants to cut the pension burden on the state, with one option being raising the retirement age. However, unions have already voiced their opposition to any such move and threatened a major dispute.

The retirement age in France is currently 60, much lower than in many other European countries.

In Germany and Denmark, the retirement age is 67, while Britain is planning to increase it to 68.
The French government has said its pension deficit will be 10.7bn euros ($14.6bn; £9.3bn) this year, and rise to 50bn euros by 2020.
Mr Sarkozy had hoped to postpone pension reform until after the next presidential election in 2012, but the global downturn has forced the issue back up the political agenda. France’s growing national debt level means the government needs to cut spending levels.

The problem is compounded by the large number of people set to retire in the coming years.
“It’s urgent now because of the demographics,” Professor Laurent Marouani at HEC Business School told the BBC. “Now, many people born between 1945 and 1952 are going to retire, so it’s becoming urgent because how are we going to pay for these people in two to three years?”

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  1. John
    June 8th, 2010 at 01:13 | #1

    Wow, I never realised that the retirement age in France was so much lower than other European countries. I’ve been living in Australia since I was young and I’m looking to move to France with my wife. We have been contributing for 7 years to Australian Superannuation . In Australia it’s compulsory for employers by law to pay 9% on top of an employee’s salaries and wages. I was wondering if anyone could offer me any advice on how the pension contribution system in France works?

    • June 8th, 2010 at 09:07 | #2

      Hello John, thank you for your message. The French pension contribution system is quite complicated and they’re planning to reform it soon, but I will send you an email within the week. Best -Michael

  1. February 15th, 2010 at 16:40 | #1
  2. February 15th, 2010 at 20:42 | #2

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