Facts on France's unpopular new pension law

22nd October 2010, Comments 0 comments

France's new pension law, adopted by the Senate upper house on Friday and likely to come into effect next week, has triggered fierce nationwide opposition including strikes and riots.

Seen from abroad, the law appears unexceptional -- if France increases the retirement age from 60 to 62 this will still leave it at one of the lowest levels in the industrialised world, where the average pension age is 65.

But President Nicolas Sarkozy's struggle to push through the reform has become the key battle of his first term, and if he prevails over trade union opposition it will form the launchpad for his planned 2012 re-election bid.

If he is forced to back down, as his predecessor Jacques Chirac was in the face of similar protests in 1995, he will finish his next two years in office as a lame duck, attacked from both right and left.

The law increases the minimum age at which a worker can retire on a state pension from 60 to 62, in stages between now and 2018.

At the same time, the minimum number of years that a worker must have paid social security contributions will be pushed back from 40 years and six months now, to 41 years by next year and 41 years and three months by 2013.

If a worker -- because of, for example, periods of unemployment, injury or maternity during adult life -- is unable to meet the 41 year requirement, he or she will not now receive a full pension until 67, up from 65.

Sarkozy's government argues that, with the population ageing and thus living longer in retirement, such measures are needed to plug the growing deficit in the social security account, which is already subsidised from state coffers.

Without a reduction in liabilities, the account will be short by 44 billion euros (61 billion dollars) by 2018, and this gap would have to be made up from the government budget at a time it is already battling a huge deficit.

Unions and the left-wing opposition oppose the reform, arguing that it puts too great a burden on ordinary workers and the poor, and they have called for tax rises on the rich and some forms of bonuses.

Unions and Socialist leader Martine Aubry, a possible rival to Sarkozy in 2012, also argue that he should have negotiated the reform with workers' representatives rather force it through parliament without agreement.

While anger has been mounting for months, protests erupted five weeks ago and unions have now staged a series of one-day national strikes that each brought more than a million protesters into the streets.

The movement has become more radical in the past two weeks with students and violent radicals joining some of the protests, burning cars and clashing with police in the Paris suburbs and the city of Lyon.

Meanwhile, open-ended strikes have begun in some key sectors, with those in refineries and fuel depots leading to a nationwide petrol shortage.

The government has responded by calling more frequently on riot police to restore order, and on Friday issued a legal notice to strikers in one refinery ordering them to return to work or face prosecution.

© 2010 AFP

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