French Assembly Votes For Pension Reform

by Ulrika Lomas, Tax-News.com, Brussels

15 September 2010

The French National Assembly has adopted the flagship measure of the government’s highly controversial pension reform bill, progressively increasing the legal age of retirement from 60 to 62 by 2018. For those born after 1950, the legal age of retirement will increase by four months every year.

Following a long debate, article 5 of the bill was adopted in a show of hands just days after strikes and demonstrations saw between 1.1 and 3 million people take to the streets in protest against the reform plans.

While both the Union for a Popular Movement (UMP) party and the New Centre (NC) party voted in favour of the measure, left-wing groups voted against. MPs were also expected to increase from 65 to 67 the age at which individuals can claim entitlement to a full pension, irrespective of whether or not they have paid their full contributions.

In a display of unity, UMP members backed French Prime Minister François Fillon in his resolve to rule out any concessions on age. These measures represent the bulk of the savings for the government estimated at around EUR18.6bn.

Defending its proposals, the government emphasized the fact that all countries in Europe have now increased their retirement age, including Germany, where the age is to be progressively increased from 65 to 67 between 2012 and 2029. Prime Minister Fillon maintained that the government’s failure to take action now would result in a deficit in the order of EUR45bn a year in 2020.

The French National Assembly is due to vote on the pension reform bill in its entirety on September 15 before the bill is passed to the Senate for its approval. Further strikes are planned in France on September 23.

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