PARIS: France‘s government is delaying a divisive overhaul of the country’s retirement system until at least the end of the year because of the economic crisis unleashed by the pandemic.
Prime Minister Jean Castex announced after meeting with unions Friday that the pension reform “will be maintained.” But he added that the government will extend negotiations on details of the plan over the coming months, instead of pushing to finalise it this summer.
The plan would end some specific pension schemes under which certain people, like railway workers, are allowed to take early retirement and others, like lawyers, pay less tax. In addition, the government is discussing with unions whether to raise the retirement age from 62, or to increase taxes to make the pension system financially sustainable in a country with a high life expectancy.
The plan prompted weeks of crippling strikes and protests by unions, who fear the changes will force people to work longer for less money. President Emmanuel Macron argues the new system, which aims to unify 42 state-funded pension regimes, will be fairer.
It was a key promise in Macron’s 2017 presidential campaign, and the government had hoped to pass the pension law by summer. But now the economy is expected to shrink at least 11 per cent this year, increasing unemployment and threatening many of Macron’s plans.
The government is now focusing on a 100-billion-euro economic recovery package instead.