France to raise retirement age from 60 to 62

16th June 2010, Comments 0 comments

The French government will raise the retirement age from 60 to 62 by 2018, Labour Minister Eric Woerth announced Wednesday as he unveiled a sweeping overhaul of the pensions system.

"It is imperative that we salvage our pensions system," Woerth told a news conference. "Working longer is inevitable. There is no magical solution."

Talk of raising the retirement age has been taboo in France where the right to a pension from age 60 has been enshrined since 1982, a legacy of Socialist president Francois Mitterrand's administration.

A pensions reform bill will be presented to President Nicolas Sarkozy's cabinet next month before heading to parliament in September, but unions have vowed to fight the changes with strikes and street protests.

"All of our partners in Europe have done it," the minister argued. "It is not possible to stay on the sidelines of this movement."

Speaking after meeting late Tuesday with Sarkozy to finalise the plan, Woerth said the reforms would allow the pensions system to have a balanced books by 2018.

The government is also planning to extend the period of contribution to social security to 41 years and three months from 40.5 years.

Several new taxes targeting high-income earners and capital income will be introduced to help finance pensions, with a view to raising an extra 3.7 billion euros (4.6 billion dollars), Woerth said.

The minister said retirement would be progressively pushed back until 2018 "so as not to upset the plans of French workers who are nearing retirement."

Reforming the country's pension system is shaping up as the centerpiece of Sarkozy's reform agenda as he winds up his term in office and heads for a re-election fight in 2012.

© 2010 AFP

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