Sarkozy annonces crunch pension reform

18th September 2007, Comments 0 comments

18 September 2007, PARIS (AFP) - French President Nicolas Sarkozy on Tuesday announced an overhaul of pensions perks for half a million mainly public sector workers, seen as a key test of his government's reform drive.

18 September 2007

PARIS (AFP) - French President Nicolas Sarkozy on Tuesday announced an overhaul of pensions perks for half a million mainly public sector workers, seen as a key test of his government's reform drive.

He promised that the so-called "special regimes" -- which allow state rail and power employees and some other categories of worker to retire early and on higher pensions -- will be reformed in the next "few months".  

"It is a question of fairness," Sarkozy said in a policy speech before journalists.

Two waves of pension reform, in 1993 and 2003, left the system of perks untouched for fear that mass train and power strikes would grind the country to a halt.

The last time a French government tried to touch the special regimes was in 1995, when three weeks of protests forced prime minister Alain Juppe to abandon his reform package.

"We will not undertake a third reform of pensions without including them," Sarkozy vowed, saying "the aim must be, at least, to align the special regimes with those in the public sector that were reformed in 2003."

"The various situations that justified this or that advantage before World War II or even World War I have largely disappeared," he argued.

Sarkozy said he would not force changes through without consulting unions, but he set a fast pace for the reform process.

He said Employment Minister Xavier Bertrand would launch consultations with unions and business leaders from Wednesday and draw up an blueprint for reform within two weeks, with branch-by-branch negotiations to follow on the detail and calendar.

Sarkozy insisted he was not seeking to "stigmatise" workers who "are not responsible from the status they inherited".

Both the biggest unions, the Communist-backed CGT and the moderate CFDT have demanded sector-by-sector negotiations, with the CGT warning of mass strikes if it is not fully consulted by the government.

But public opinion is now firmly behind plans to reform a scheme increasingly seen as unfair, with more than two thirds of French people saying it is a "brave" move by the government, according to a BVA poll.

Currently the state bails out the "special" pensions fund to the tune of some five billion euros (6.9 billion dollars) a year, because contributions from workers fall far short of payments.

Some 1.1 million people currently draw pensions under the scheme, funded by contributions from 500,000 workers.

The reform would affect employees of the state-owned SNCF rail company, the RATP Paris metro operator, utility suppliers EDF and GDF and some other categories of worker including members of parliament and lawyers' clerks.

Workers in these professions can retire after 37.5 years, instead of 40 years for others.

At RATP for example, more than half of employees retire before the age of 55, and the average duration of retirement is nearly 25 years, compared to 17.7 years in the private sector.

In addition, pensions are calculated on the basis of final salaries rather than on the average over the course of a career.

AFP

Subject: French news

0 Comments To This Article