French trade unions reinforce stance despite Macron’s steamrolling reforms through Parliament

French pension reforms only serve to increase inequality


March 27, 2023

/ By / Paris

French trade unions reinforce stance despite Macron’s steamrolling reforms through Parliament

Most people blame President Emmanuel Macron for pushing the reforms through without a debate and a vote (Photo: Ranvir Nayar)

The last week has seen the French trade unions reinvigorated against the pension reforms that were literally steamrolled through the Parliament by French President Emmanuel Macron. With the participation in strikes reaching new records, France seems set for a chaotic spring as neither side is in a mood to give in. Even if Macron were to win this battle of wits, it would be nothing short of a pyrrhic victory.

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Enthused by the massive turnout for Thursday’s and Saturday’s nationwide strikes in France against the pension reforms proposed by President Emmanuel Macron, trade unions have warned that their actions will only be intensified in the days ahead and have already called for another strike on March 28.

The fresh strike action did indeed attract widespread support across various segments of French economy and was not limited to the public sector employees, who are often accused of being spoilt by an overgenerous French State. While the criticism may apply to some of the public sector workers, it is a fallacy when compared to the broader public sector and certainly the private sector, especially the less-skilled or unskilled employees at the lower rungs of employment.

Little wonder then that over 70 pc of the French blame Macron for pushing the reforms through despite lacking a majority in the Parliament. To steamroll the bill, without a vote which the government would have lost, Macron’s Prime Minister Elizabeth Borne resorted to disingenuous tricks of resorting to 49.3, a clause of the French Constitution that allows the government to bypass vote in the Parliament to enact laws.

This provision was clearly not created for such political skullduggery and the public opinion that had already swung away from Macron for his perceived haughtiness and high handedness sunk even further, putting Macron at the lowest approval ratings in the six years of his Presidency.


Pension reforms reinvigorated French trade unions

Most people blame Macron for pushing the reforms through without a debate and a vote and in face of the mounting public anger about not just the reforms but also his handling of the entire controversy.

Pension reforms has long been on the list of things to do for several Presidents for well over a decade, who were worried about the supposedly sharp growth in deficit that the pension system may face in the decades ahead, mainly due to the ageing population. While some Presidents have toyed with the reforms, but backed off in the face of a series of strikes, Macron has made it almost like a matter of personal prestige to push through the reforms.

He tried hard in the first term, but had to withdraw in face of opposition and now he is trying to push the reforms through to leave it as one of his legacies and hence the importance that he is attaching to pushing it through.

The main issue is does France need pension reforms in this shape? In one word, No. Yes, the country is facing ageing population, yes, there is a deficit in the pension system which is supposed to be growing in the years ahead and yes some of the conditions at workplace in France are indeed highly regulated and burdensome for a modern work culture to thrive.

But the devil is, as usual, in detail. France is still the among the fastest growing large European Union countries, in terms of population growth and fertility rates. Its birth rate was 10.4 per 1000 people, as against 9.1 in Germany or 6.9 in Italy.

Coming to pensions, a total of 345.1 billion euros were collected under various pension schemes in the country and the country registered a surplus of over 3.5 billion euros in 2021 and last year too saw more money coming into retirement kitty than the payout. Even in the government’s own estimations, the deficit is likely to reach Eur 7 billion or more by 2030.

Yes France has to cut its fiscal deficit in line with the European Union norms. However, right since 2017, Macron’s entire focus seems to have been on how to generate more revenues by cutting govenment spending, with this year’s budget forecasting a growth of less than 0.6 pc in public spending, the lowest in two decades. There is only so much more that the French government can hope to generate but cutting corners and each further cut will only lead to more heartburn amongst the poor, who are increasingly feeling and being left behind.

Though France is supposed to be one of the most egalitarian societies, the reality is something else. Inequality has risen sharpy since 2018 and exacerbated since the outbreak of Covid-19. Right from the time that he was elected for the first term, in May 2017, Macron has been called a ‘Banker’s President’ or the President of the Rich due to his past in investment banking.

Unfortunately for Macron, his policies while in power over the past six years have gone a long way to reinforce that opinion as Macron has slashed the taxes on companies and did away with the wealth tax.

It is time that Macron recognised the problems of the poor and found ways to ease their suffering rather than cut away at the only support they would have. According to the OECD, France has one of the lowest shares of corporate tax as part of its total revenues as well as lowest in terms of personal income and profits and gains, while it is the second highest in terms of tax collections to GDP ratios. High overall tax collections come almost single-handedly due to high social security taxes.

It is no secret that the wealth of the ultra-rich in France, like elsewhere in the world, has grown significantly in the past three years, driven by a stock market boom. This is also true of the wealthy and upper-middle classes who have had windfall earnings since the pandemic outbreak. Similarly, the profits of the corporate world have risen obscenely over the past decade.

Macron should focus on raising additional revenues by taxing the companies and the rich. Even a minor hike in tax rates for the wealthy and large companies can generate a windfall that will not only cover the government’s fiscal deficit but also generate a surplus. It is not only morally the right thing to do, but also democratic as tax rises on companies or the rich will make a small dent in the enormous wealth a minuscule minority, while easing the pressure on the poor who currently are bearing the burden of not just their own needs, but also those of the super-rich.



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