French President Emmanuel Macron has succeeded in achieving pension reform, but its price will be significant for his political career, writes Reuters.
Given that raising the retirement age from 62 to 64 years just puts France in a similar position to its European Union (EU) neighbors, there has been astonishment abroad at the widespread protests and public anger.
Theoretically, the French really do retire later than the residents of neighboring countries. Currently, the average retirement age in the EU is 64.8 years, and France, together with Greece, have so far been the countries where citizens go on retirement earlier. According to the Organization for Economic Co-operation and Development (OECD), the relatively low retirement age and longer life expectancy mean that
the French actually spend much more time in retirement than others.
French pensions are more generous than elsewhere. A French pensioner receives about three-quarters of his after-tax income before retirement.
Such a system comes at a price. France allocates almost 14% of its expenditure to pensions. This is almost double the average of OECD countries – 7.7%. Only Italy and Greece spend more on pensions than France.
The system does not provide advantages for everyone. When an employed person will be able to retire also depends on the period of contributions to the pension system.
According to the independent Pension Guidance Council,
more than a third of French workers are already retiring later than the age of 62.
Often people who started working later because they studied or people who brought up children (which is not counted in the length of employment time) work longer than the official retirement age.
The OECD estimates that currently a man who started working at the age of 22 retires at the age of 64.5, which is by one-tenth more than the EU average (64.3 years), but less than in Germany (65.7 years).
Appearing on television on the evening of the 17th of April, Macron explained that now he will have to work a little longer, but this will benefit the economy and allow for more extensive investments. Opposition parties and unions have said that Macron’s plans are a brutal attack on the country’s welfare model.
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