France's Macron to Push Through Pension Reforms After Years of Pushback

French President Emmanuel Macron is set to unveil a new pension reform plan on Tuesday, which is expected to face some backlash.
Macron is serving his second term as France’s president, and he has promised to overhaul the pension system. This has been a long-standing promise of his, dating back to when he was first elected in 2017.
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France's legal retirement age is currently 62, which is lower than in many developed markets including much of Europe and the US. The public sector also has "special regimes", or sector-specific deals that allow workers to retire before they're 62.
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In late 2019, Macron’s government proposed a single, points-based system for retirement. The idea was to harmonize the rules across sectors, so that a person could retire once they had gained a certain number of points.
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The plan was met with strong opposition from public sector workers, who protested for several days. Amid the protests and the coronavirus pandemic, Macron decided to put the plans on hold in early 2020.
Some people suggested revisiting the plans in early 2022, but it was decided that it would be too close to the presidential election, which happened in April of the previous year.
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Macron said that this year will be focused on pension reform in order to create a balanced system for the future. He made this announcement during his New Year's address.
This year, we will be reforming our pension system to ensure its long-term sustainability. This is something I promised you, and I am committed to delivering on that promise.
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He said that he would like to finish negotiations so that new rules can go into effect by the end of summer 2023.
Renaud Foucart, senior lecturer in Economics at Lancaster University, told CNBC’s “Squawk Box Europe” Tuesday morning that French President Emmanuel Macron has decided to move quickly on his reform agenda, despite the likelihood of disruptions and strikes. Foucart said that the current procedure is supposed to last no more than 90 days.
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He added that the method may be quick and dirty, but it is much more likely to pass than it was five years ago.
Étienne Ollion, a sociology professor at Ecole Polytechnique, told CNBC’s Street Signs on Tuesday that Macron is “keen on keeping the image of a reformist president.”
During his first term, he focused on key reforms, including labor laws and taxation.
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One of the main issues facing the French government is the new retirement age. In the past, Macron suggested this could be raised from 62 to 65, but at a gradual pace with increases of about 4 months per year until 2031.
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The French government is reportedly considering increasing the amount those on the lowest pensions receive in an effort to make the transition to a longer working life more acceptable to the public. This information has been reported by French media, but CNBC has not been able to independently verify it.
Macron's first proposal, from 2019, also envisaged addressing the so-called "special regimes." These are regimes that allow for certain benefits or privileges that are not available to the general public.
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If there are any changes to these accords, it is likely that the industries affected will have a negative reaction.
France's relatively low retirement ages are a burden on its public finances. The country's pensions advisory council has reportedly estimated a deficit in the pension system of around 10 billion euros ($10.73 billion) each year between 2022 and 2032.