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A Harsh Necessity: Why Macron's Pension Reforms Are Essential in the Face of an Ageing Continent

Updated: Nov 29, 2023

Deep Dive Article

Credit: Wikimedia Commons

French President Emmanuel Macron has signed into law his highly unpopular pension reform plan, which will raise the state pension age from 62 to 64. In light of socio-political disquiet and discontent, Macron has defied criticisms and pushed his legislation forwards. After months of legislative back-and-forth, large scale protests and one no confidence vote, the President has received to go-ahead and signed his plan into law.

France’s top constitutional body, The Constitutional Council, cleared the reform and rejected opposition calls for a referendum. French Unions have called on workers across France to return to the streets in protest on the 1st May. The passing of this law has been one of, if not the, toughest domestic challenges Macron has faced in his second term, and it has resulted in his own personal popularity dropping significantly. Since the pension reform protests began in January this year, the President’s approval rating dropped from 36% to 30%, according to Politico opinion polls. This is to be expected when independent polls suggest up to two thirds of French citizens are opposed to working for a further two years.

Following the reform being signed into law on the early hours of Saturday morning, spontaneous protests erupted across the capital and in other cities, including Marseille and Toulouse. In the city of Rennes protestors set fire to the entrance of a police station. A Paris police official said that over 112 arrests had been made by the days end. At the height of the protests in March, there were over 1.3 million people demonstrating against the reforms. Marine le Pen, Macron’s chief opposition and leader of the far-right National Rally party capitalised on the unrest and decried the reform. She responded to the court decision on social media saying that “the political fate of the pension reform is not sealed”.

Despite the public unrest and opposition, many lawmakers and independent policy analysts have defended the court’s decision to defend the law and their rejection of a proposed referendum, a request pushed by opponents to the reforms. This is because France is an outlier on the European continent in terms of the pension age. The country’s state retirement age is 62, much lower than many of its European neighbours; in the UK the retirement age is 66, and in Italy it’s 67. This coincides with an increased average life span across the continent.

Thanks to medical advancements, the average life expectancy in Europe has increased drastically. According to the UN, life expectancy increased from 46 to 68 years between 1950 and 2010. This has since risen to 73.16 in 2023. But with European birth rates declining, the continent is at risk of ageing too quickly. According to Statista’s data, Europe is leading globally in the proportion of the elderly population with roughly 21% of the continent considered elderly (classed as 65 years of age and above). Compare this to the proportion of Africa’s population that is considered elderly, at 4.8%, and it’s clear to see why the issue of retirement has taken centre stage. With developing nations across South America and Africa enjoying a younger population, and a larger work force, Europe will have to act to stay economically competitive in the future. After all, the continent is expected to have over half a million centenarians by 2050.

This issue is the foundation of Macron’s argument. The French President argues that the nation’s generous welfare state, while benefitting the public, has long acted as a drain on the economy and workforce. Macron cites the economic hardship the country faces as the underpinning of his reforms. By the third quarter of 2022, France’s national debt stood at 113.4% of GDP, significantly higher than their neighbours. The French workforce is also shrinking. There are currently only 1.7 workers for every pensioner, down from a 2:1 ratio in 2000.

Macron has proved his resilience and determination to pursue this law despite adversity from within his party, and opposition both in parliament and across the country. The President wants this bill to be his “flagship policy” argues David S Bell, a professor of French government and politics. “But the problem isn’t an immediate crisis – it’s a future burden based on economic projections. It’s the opposite way politics works” he added. It seems clear that Macron was willing to take a popularity hit to ensure this bill was signed into law. It seemingly doesn’t benefit him at all to pursue the policy as rigidly as he has – he’s certainly in a more precarious position than he was in before opposition began. If anything, it shows that the President is determined to secure his legacy more than anything. Rather than focusing on short-term, headline worthy politics, Macron has his eyes on the bigger picture. It stems from a deep-rooted patriotic desire to keep the country economically competitive moving forwards. Macron has argued that the reform is “not a pleasure, it’s a necessity”, arguing that the situation would only worsen the longer they wait.

The French premier’s comments don’t lack substance. France has enjoyed lower than average retirement since the 1980s, when socialist president François Mitterrand lowered the age to 60. The effects of this are felt today. France spends 16% of its national income on pensions, compared to an average 14% across EU member states, and roughly 10.6% in the UK. Ultimately, Macron recognises that the state pension fund, which relies on people in the workforce to fund retiree benefits, is running out of money. As early as 2027 the system could have a deficit of over €12 billion. In fact, some more conservative politicians have criticised Macron’s bill because it doesn’t go far enough, arguing that by the time France’s retirement age reaches 64 in 2030, they’ll have the same they are faced with at present. Their retirement age will be lagging behind other European countries, who will be increasing their respective ages in line with increasing life expectancy.

Regardless, the public mood is strikingly different, and one of increasing pessimism. Polls consistently show that only around 20-25% of French people support increasing the pension retirement age. This public dissatisfaction has been on display for the world to see in recent months too. Likewise, Shahen Vallée, a former economic advisor to Macron, has argued that the reforms are “polarising” and will have “disastrous medium-term consequences for the French public”.

But Macron is aware of this. And regardless, he has remained steadfast in his pursuit of the reform plan. He will no doubt be reminded of the challenges Nicolas Sarkozy faced in 2010 when he increased the retirement age to 62 and faced tremendous backlash for doing so. Some political analysts have questioned why Macron has pursued this policy so rigidly, even in the face of such intransigent opposition. However, a glimpse into his party, Renaissance, could provide some insight.

Macron has long been criticised in his party for ruling it as a “one man band”, and for having no apparent successor. The President has been reluctant so show favour to any potential candidate to replace him. No one is being groomed or sharing the spotlight. There seemingly isn’t a strong candidate who could pick up enough votes to replace Macron when his term ends. With the President serving his second mandate, he will not be eligible for re-election in 2027. Some analysts have argued that this has created the perfect storm for Macron. Without the shadow of re-election over his head, Macron is able to pursue his reforms wholeheartedly, and he has demonstrated that he is unafraid of using more controversial legislative tools to get there. Similarly, some have suspected that the Renaissance Party is willing to take an electoral defeat.

Armin Steinbach, a professor of European law at HEC Business School, when asked about who Macron’s successor could be, argued that “None of [his party] have an interest in being the official successor”. Instead, Steinbach suggests a natural break from Macron could be beneficial for the party. In this case, a ‘natural break’ meaning a term in opposition, the argument does make sense. Candidates will easier be able to distance themselves from the unpopular policies of Macron, which is something Rishi Sunak in the UK has struggled to do. His party’s approval ratings have stagnated at around 25% since his predecessor’s disastrous economic reforms.

Therefore, Macron’s ruthless pursuit for reform can be better understood. With no fears of re-election hanging over his head, and no concerns about disillusioning his voters, the French President has a theoretical green light to pursue the policies that matter most. Macron is focused on his legacy, and believes the pension reform is a necessity to maintain France’s future economic and geopolitical relevance on the world stage.


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