France Mulls Pension Reform

by Ulrika Lomas, Tax-News.com, Brussels

12 May 2010

French President Nicolas Sarkozy has once again ruled out any rise in compulsory levies in France in order to finance pension reform, although he has, however, confirmed that an extra effort will be required from the country’s top earners as well as from those deriving income from capital.

During a keynote address to the country’s social partners at the Elysée Palace in Paris, the French President pledged that pension reform in France will be “fair”, noting that it will concern all employees from both the public and the private sector, that it will be progressive, and that it will serve to reinforce a system of fairness by demanding an additional financial effort from high-income earners and from those receiving income from capital.

The French President categorically dismissed any increase in compulsory levies, arguing that this would merely serve to reduce the quality of life for individuals in France, and would penalize growth.

Sarkozy pointed out that for a demographic problem, demographic responses are necessary, such as, for example, by raising the legal age of retirement or by increasing the contribution period.

President Sarkozy announced that France’s Employment Minister Eric Woerth would shortly make public a guidance document setting out the principles of the reform and serving as a basis for a new stage of intensive dialogue.

Recommended