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Protests over Pension Reform in France

In an interview on the Diane Rehm Show, Justin Vaïsse joined with other experts to talk about the recent strikes in France and their implications for economic reform efforts in Europe. In the interview, Vaïsse contends that the protests have been sparked by the specifics of the reform measures and that there is general acceptance in France of the need for effective government action to counter demographic and fiscal realities.

DIANE REHM: And we’re back, talking about what’s happening right now in France. Though the protests seem to have diminished substantially today, yesterday, there were some 3 million people said to be in the streets, protesting President Sarkozy’s aims to reform the economic system. Justin Vaisse is a senior fellow at The Brookings Institution. Justin, we hear that the French are, for the most part, arguing over this increase in the retirement age from 60 to 62. But what else is the fight about?

JUSTIN VAISSE: Yes. The — I guess the first thing to say is that, currently, the legal retirement age is 60. And the proposed reform is 62. But the number of annuities you need to get full retirement is around 42 years. So that means that if you — for example, if you started working at 25 after college, you would want to retire at 67 today already. So it’s not like all French workers are going in retirement with full pensions at 60. And, yes, it’s true that the argument is more about the specifics of the reform rather than the need to do something. Most people in France do realize that demographic changes and globalization make it necessary to do something.

VAISSE: And the question, of course, is on the specifics. And the plan proposed by the government does not meet — I mean, you know, as we say, 71 percent of the population supports the movement, which is more than a majority, which is very — so it’s a very broad-based movement. So the questions are, you know, when you — people who started at age 16 or 17, should they also retire only at 62, as opposed to those who started late, and what about the different kinds of jobs? Should workers in factories or, you know, gardeners, miners, retire at the same age are — as those working in banks? These are the kind — oh, women, when they have their careers interrupted, so they don’t have the full number of annuities when they reach 60 or 62. Shouldn’t they be given some kind of compensation, et cetera? And, you know, more generally, what the left is arguing is that they should be more — sort of better share of the burden between taxing workers and taxing capitals — revenues from the capital. So that’s what the discussion is about.

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