Episode 164: Papa Macron's Pension Swindle

Previously in Europe

• Episode: Episode 164: Papa Macron's Pension Swindle
• Website: Previously in Europe
• Feed URL: http://simplecast.com/podcasts/2120/rss
• Duration: 01:01:43
• Published: 2020-01-19 17:40

This week we discuss the fun that is the ongoing French protests and papa Macron's pension reform plans

Support us on Patreon!

WE HAVE A T-PUBLIC STORE what a fashionable way to support our podcast

We now have a website that you can find here!

Feel free to send us an email at [email protected] or follow us on Twitter @PrevInEurope

If you can please leave us a review on Apple Podcasts and if you can't do that tell a friend, this stuff really helps us out

Also, have you considered Matteo Renzi?

Show Notes

This would be nice

Good French Pension Reform

Papa Manu's plan

This was a core part of Macron's presidential and subsequent parliamentary majority campaigns for en Marche - reform the "unfair" pension system.

So why is it unfair?

Well:

• It's much more complicated than most countries - there are 42 different systems (sort of) so Macron wants to bring this into one, sounds sensible (https://www.thelocal.fr/20191211/how-do-french-pensions-compare-to-the-rest-of-europe)

• This is arguably unfair to many groups - because if you worked in a non-unionised industry (or at least without a good union) you don't have the special system

• So they want to bring it into one points system where each euro contributed gets you some number of points and you get extra for things like unsocial hours, dangerous job, time on maternity leave.

So what's the problem that does sound fairer?

.. umm:

• Part of the plan originally was to raise the retirement age to 64 (you would only get the best value at that age), but they've backed off from that part to try chill the protests, which we'll get onto (https://www.nytimes.com/2020/01/11/world/europe/france-pension-protests.html), also this may only apply to those nearing retirement age soon so it might come back (https://www.politico.eu/article/french-pm-edouard-philippe-offers-concession-on-pension-reform/)

• Unions who have their own system argue they're losing exemptions they fought hard for - rail workers retire early due to it being hard work. Civil service workers get their last job used to calculate their pension partly to encourage people to work in it (at lower pay than the private sector)

• The points system is not transparent - the value of the points will get calculated by the state at the end and therefore it won't be transparent in the same way as basing it on salary would be (https://www.dw.com/en/france-unveils-controversial-pension-reforms/a-51617322)

• They were also proposing the threshold of your income that would get you points would decrease - decreasing the whole pot

So like that doesn't sound good...

A lot of the fear from the unions (and the public generally) is around the details of this reform, not the refusal for any reform. Polling from the start of the year said only 25% of people think the reforms are okay the way they are. The strikes have pretty good approval numbers... but other polling shows that people broadly want some sort of pension reform (https://www.lefigaro.fr/politique/retraites-malgre-un-recul-le-soutien-des-francais-a-la-greve-reste-majoritaire-20200103)

The centralised points system on these terms would wipe out most special cases unions have fought for. This is a short term fix that would help balance the countries books.

Unions such as the teacher's union would very easily be able to make the argument nobody would become a teacher at their bad salaries in France if the pensions were also bad.

The train unions could see this as a mechanism to make train privatisation easier.

The general point is that Macron is trying to get filling the pension shortfall that the government now covers as part of its budget off the books. They're pretending it's to be more fair but its mostly about removing any subsidy from the state to cover public service (and some other things like the arts) gaps between contributions and payouts.

You'll see in most media coverage the report from COR, an independent pension advisory committee, who forecast the deficit in the system would be 0.7% of gdp by 2025 if there is no reform - making this sound urgent.

France24 points out this is only one of their forecasts and another of their scenarios shows it shrinking to 0.2% - the big difference in the forecasts is made up largely from expecting the state to cut some of the subsidies to the system... so the government will stop covering parts of the shortfalls that exist to make it look like the shortfalls get bigger when actually they would shrink if they changed nothing. (https://www.france24.com/en/20191223-why-france-s-unsustainable-pension-system-may-well-be-sustainable).

This is in alarming opposition to the contention that age demographics are the primary reason for the need to reform.

https://en.wikipedia.org/wiki/2019–20_French_pension_reform_strike

But people want reform

Yeah, you could argue that 42 different systems is wasteful and an obvious win... so build all the existing exemptions into it and it should be cheaper to run, no?

Any cost savings? Great make the system slightly more generous to everyone overall

Police Violence is Trés Mal

Antoine Baudet: a preschool teacher who lost his hand after picking up what he thought was a smoke grenade.

Zineb Redouane: an 80-year-old Algerian woman who was shot in the face with a tear gas canister while trying to close the shutters to her window in her fourth-floor apartment.

Patrice Philippe: Lost his right eye after being shot in it with a rubber bullet.

A story of police violence in France
a great mini-documentary by Ross Domoney
https://vimeo.com/374210759